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According to Rabobank analysts, while the main focus this week will be on the ECB, Turkey is likely to steal the spotlight in the EM space.

Key Quotes

“Ahead of the upcoming CBRT meeting scheduled on September 12, President Erdogan reiterated his expectation for significantly lower interest rates saying that the policy rate will be cut to single digits “in the shortest period.”

“With inflation falling faster than anticipated, the lira staying relatively stable (for now) and President Erdogan expecting significantly lower rates, we predict that the policy rate will be slashed by 300bps to 16.75% on Thursday.”

“However, we are not comfortable with such a rapid pace of monetary policy easing.”