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USDTRY Continues Climb Toward Pre-CBRT Levels

TURKEY
  • USDTRY has now retraced around 70% of the CBRT-inspired plunge on Aug 24. The pair last deals just shy of the 20-day EMA at ~26.77, though remains above the 50-day EMA.
  • The benchmark Borsa Istanbul Index closed yesterday’s session 0.44% lower though pierced the 8000.00 handle for the second day in a row, recording a fresh record high in the process. The banking sub-index also recorded a fresh record high but ended the session in the red. Note local markets are closed today as Turkey celebrates Victory Day. Markets re-open tomorrow.
  • Turkey’s 5Y credit default swaps traded below the 370 level for the first time since September 2021 this week. Officials have previously noted that they expect this indicator to decline ahead of the announcement of the government’s Medium Term Economic Plan in September. However, the decline in Turkey’s CDS is in-line with that of broader CEEMEA regions (Poland and Hungary have both recently recorded fresh cycle lows in their 5Y credit default swaps).

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