Fri, Dec 04, 2020 @ 23:54 GMT
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Phase-One Signed. Equities Advance. Turkey To Cut

The signature of the phase one deal between the US and China sent the S&P500 and the Dow to fresh intraday record highs, although the last minute announcement that the tariff cuts on Chinese exports would not happen before the US presidential election left investors wondering if China could...

US Open – Earnings, Draghi, CBRT, Oil, Gold, Bitcoin

US stocks are bracing for the busiest day of this earnings season. Industrial giants, 3M and Raytheon delivered contrasting results in the pre-market. 3M posted mixed earnings results, but slashed their full year EPS forecast. Raytheon delivered a beat on both the top and bottom and raised guidance in-line...

CAD Holding Its Gains, More Easing Form CBRT To Come

CAD flat following election results, yet high appreciation potential Election results have left CAD traders unimpressed, although reelected PM Justin Trudeau should face a minority government that should force a coalition with New Democratic Party leftists. As risks of new general elections triggered by a vote of no confidence appears...

CBRT’s « Bazooka », Japanese Data Worry

CBRT's « bazooka » The easing cycle is alive and well in EM counties with Turkey moving forward with a significant reduction. In an unexpected move, the Central banks of Turkey chopped its benchmark one-week repo rate by 325bp. The policy rate now stands at 16.5% from 19.75% bringing the...

ECB Interest Rate Decision

The ECB is to release its interest rate decision today and is expected to remain on hold at 0.0%.EUR OIS imply a probability of 52.15% for the bank to remain on hold at the current stage. However there is also another 47.85% probability to cut rates by 10 basis...

Short-Term Outlook: All About Earnings, Trade, And Easing

Risk appetite is waning as earnings season picks up and as political posturing between the Chinese and Americans see no substantial progress on the trade front. US stocks have been unable to extend the record rally despite a relatively good start to earnings season that has seen a majority...

Turkish Lira Slides As Erdogan Replaces CBRT Head

The Turkish lira is sliding once again amid renewed concerns that President Recep Tayyip Erdogan is ruining the nation’s economy, just as inflation was starting to ease back. His decision to replace the Turkish Central Bank’s Governor over the weekend has backfired with the lira taking a tumble. Undoubtedly,...

USD/TRY: Turkish Lira Drops As CBRT Removes Pledge To Tighten Policy

A few moments ago we published an article on the Indian Rupee HERE, in which I mentioned that emerging market currencies could come under further pressure. Lo and behold, the Turkish lira has just dropped +1% on the back of the latest announcement by the Turkish Central Bank. The...

Turkey is Slowly Becoming Argentina

The Turkish lira fell under immense pressure after the Financial Times reported the Turkish central bank (CBRT) used billions of dollars in short-term borrowing to bulk out its reserves. At one point, the lira was down 2% to the dollar, the lowest levels since October 2018. Concerns remain high...

UK Parliament Rejects Theresa May’s Brexit Deal

The UK government suffered a substantial defeat yesterday, as the UK Parliament rejected Theresa May's Brexit plan with a difference of 230 votes, marking the worst parliamentary defeat for a government in over a century. The Labour party moved swiftly tabling a motion for a confidence vote, right after...

USDTRY Outlook: Lira Firms after Unchanged CBRT

The Turkish lira firmed on Thursday after the CBRT left interest rates unchanged at 24%, as expected. The USDTRY pair holds in red for the second straight day after corrective action from new 10-week low at 5.5182 (18 Oct) stalled at 5.8735. Base of thick daily cloud (5.8097) marks...

EUR Better Bid Ahead Of ECB Meeting

EUR/USD consolidates around 1.14 ahead of ECB meeting The European Central Bank is expected to keep policy unchanged today. Nevertheless, in light of yesterday disappointing PMIs figure from the euro-area, one cannot exclude that Mario Draghi would shift to a more cautious tone regarding the growth outlook. The euro-area composite...

Bullying Up On Safe Havens

Tuesday October 23: Five things the markets are talking about Global stocks have swung sharply lower overnight, amid growing fears about the health of the Chinese economy and a slew of geopolitical concerns – U.K, Italy and Saudi Arabia. In Italy, the populist-led government has indicated that they plan to proceed...

Investors Are Still Hesitant To Reload On Risk

Investors are still hesitant to reload on risk World equities idled on the first trading of the week as investors continued to have mixed feelings. Half of Europe's markets ended wearing green, while the other half headed lower. In the US, only the Russell 2000 – a small-cap stock index...

Italy: Risk On, Risk Off?

Wednesday October 3: Five things the markets are talking about European markets have so far shrugged off losses in Asia to post gains this morning amid hopes that Italy’s budget deficit could be lowered, but concerns about the country’s debt and budget plans remain. The EUR (€1.1573) has rallied from yesterday’s...

Sterling Strongest as Brexit Deal Looks Relatively More Certain in a Chained Erratic World

It was another typical week with market moving headlines flying around. Being two highly anticipated non-events, BoE and ECB didn't disappoint investors by giving nothing new. On the other hand, there was a deep sense of nervousness ahead of Turkish central bank rate decision. The CBRT brought investors back...

Weekly Economic and Financial Commentary: US Growth Remains on Track

U.S. Review Growth Remains On Pace With Little Sign of Overheating The inflation data took center stage this week. The CPI and PPI both came in slightly below expectations and inflation expectations remain well anchored. Import prices also fell more than expected during the month. The NFIB Small Business Optimism...

The Weekly Bottom Line: Rising Rates Eating Into Household Incomes

The Weekly Bottom Line U.S. Highlights Foreign central banks took center stage this week. The Central Bank of Turkey raised its policy rate to 24% from 17.75% in the hope of retaining and attracting new foreign capital. The ECB confirmed it will taper its asset purchases to €15 bn a...

Prospect Of Sino-US Talks Lifts Markets

China open to US invitation for trade talks; Carney appears in Dublin after fresh Brexit warning; Lira steadies after CBRT hike but significant risks remain. It's been a more positive start to trading on Friday, with talks of new Sino-US trade talks potentially helping to lift risk appetite among...

Will The Fed Slow Interest Hikes?

USD in the doldrums as inflationary pressures fade away Even though central banks’ meetings took centre stage yesterday, investors were also keeping an eye on key economic data from the US. The August inflation report was released yesterday and came in slightly below market expectations. Headline inflation eased to 2.7%y/y...

Lira Soars After CBRT Rate Hike, Asia FX Attempts To Benefit

The brave move from the Central Bank of the Republic of Turkey (CBRT) to raise interest rates much higher than market expectations just hours after President Recep Tayyip Erdogan again made public comments against high interest rate policy appears to be supporting improved risk appetite at the end of...

Market Recap And Outlook For Friday

After a busy day in the markets, the US dollar was trading quite mixed at the time of writing, rising sharply against the yen and falling noticeably against the pound and in particular the euro. The EUR/USD rose sharply for two reasons: soft US inflation data and a slightly...

Mid-US update: Euro and Sterling Strongest, Yen and Dollar weakest after a long day

Yen and Dollar are trading as the weakest two today. On the other hand, Sterling and Euro are the strongest ones, with Australian Dollar trailing behind. There are a couple of underlying themes today which triggered much volatility. Firstly, the story of restarting US-China trade negotiation continued to develop. White...

Sunset Market Commentary

Markets Main FI and FX markets treaded water during European trading, awaiting the outcomes of policy meetings in Turkey, the UK and EMU. The Turkish central bank raised its policy rate significantly, managing to lift TRY. Some expected spill-over into EUR/USD gains via improved risk sentiment on EM FX didn’t...

Fresh Dollar Selling after Core CPI Miss, ECB & BoE Stand Pat While CBRT Hikes

Dollar has been relatively today and risks of escalation in trade war diminished. Deeper selling is seen after inflation data showed larger than expected fall in core CPI in August. Though, the greenback is currently underperformed by Yen due to easing risk aversion. In addition to trade optimism, Turkish...

Into US session: BoE & ECB stand pat, CBRT hikes, TRY had a wild ride

Entering into US session, Australian Dollar is trading as the strongest one today, followed by Swiss Franc. On the other hand Yen is the weakest one, followed by New Zealand Dollar. Optimism on easing US-China trade tension is a generally theme today, lifting Asian and European stocks, except UK....

Turkish Lira surges as CBRT hikes policy rate from 17.75% to 24%

What a volatile day for the Turkish Lira. It originally plunged on President Tayyip Erdogan's comments against interest rate. But then CBRT announce to raise policy rate (one week repo auction rate) from 17.75% to 24%. USDTRY drops more than -3% after the release and is now set to...

Turkish Lira Rally Halted On U.S Sanctions Threat

Friday August 17: Five things the markets are talking about Global trade worries have not disappeared, they are just on hiatus, as market participants prefer to regroup and strategize in this unorthodox U.S trade and foreign policy environment. Emerging market worries are not going away any time soon. They continue to...

Impacts of Turkish Turmoil on Eurozone Limited. Yet, Market Sentiment is Contagious

Selloff in Turkish lira and euro has stabilized but the worst is not yet over. As we mentioned in the previous report, the ultimate reason for lira’s slide is President Recep Tayyip Erdogan's failed economic and monetary policy. The Turkish central bank TCMB, since his re-election as the President, ...

Reactions to Rumor of Releasing American Pastor Shows Markets Ready for a Bounce

With a near empty economic calendar, the focus is entirely on development in Turkey. Turkish central bank's announcements did calm the markets. While USD/TRY breached 7.2 earlier, it dipped to as low as 6.4136 after CBRT's announcement. At the time of writing, it's back at 6.9 with an eye...