Cristian Maggio, head of emerging markets strategy at TD Securities, points out that the CBRT has held all rates today, as expected by them and the consensus and as a result, the 1w repo rate and WACF have remained stable at 24%.
Key Quotes
“The focus now shifts to the statement which has also remained largely unchanged. However, the few changes made by the MPC are all located in the central paragraph, suggesting that the moment to ease rates may be approaching.”
“The market was already positioned for rate cuts in the upcoming meetings, while the consensus was largely in favour of a hold today. Clearly risks were leaning in the direction of easing, which means the announcement has triggered a lira relief rally after the announcement.”
“However, if our interpretation is correct and the MPC is slowly adjusting its rhetoric in a more dovish direction, the lira should weaken and the front-end of the curve soften instead.”
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