TURKEY: CBRT Set to Deliver Third Consecutive 250bp Rate Cut
Mar-06 08:22
- Focus is on the CBRT rate decision today (11:00GMT/14:00 local time), where another 250bp rate cut is expected following the below-expectations CPI print for February. Our full preview of the meeting, with a summary of sell-side views, can be found here.
- Addressing the textile industry and referring to today’s rate decision, Trade Minister Omer Bolat said, “We expect a favourable decision,” adding that, “This will also provide a significant reduction in loan costs. We will see financing costs coming much lower toward the summer. The improvement that you have been waiting for in terms of exchange rates is slowly happening.” Comments as per Ekonomi newspaper.
- Citing central bank data, Ekonomi report that the net FX shortfall of the real sector reached a 5-year peak of $141.9bln due to the increase in domestic and foreign loans.
- Bloomberg run a piece in which they note that the UAE’s pledge to invest $51bln in Turkey is faltering two years after it was announced, noting that a rebound in Ankara’s economic fortunes has emboldened local firms to hold firm on valuations. The latest setback came when AD Ports Group, a company backed by Abu Dhabi wealth fund ADQ, failed to close a deal to acquire operating rights for a port in western Turkey.
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RIKSBANK: January Minutes May Provide Signal On Rate Outlook
Feb-04 08:18
The Riksbank January meeting minutes are due today at 0830GMT/0930CET. This release may provide a clearer signal on the rate outlook than the decision itself, given the non-committal policy statement guidance.
- The January rate decision (25bp cut to 2.25%) was unanimous, though Governor Thedeen suggested in the press conference that the minutes would highlight “nuances” in opinions amongst Board members.
- Key focus will be on whether the three doves from the December meeting minutes (Breman, Jansson and Bunge) still see a case for more cuts in H1 2025, and whether the March decision should be considered live.
- We expect Thedeen and Seim to continue offering a more cautious outlook for policy rates. In the January press conference, Thedeen said that the Riksbank’s “best assessment” was that there would be no more rate cuts (in line with the December MPR rate path). However, this assessment was heavily caveated, with the Governor citing significant uncertainty to the outlook (e.g. from potential trade barriers and economic fragmentation) and the need to assess incoming data in the context of the December projections.
STIR: SFRZ5/Z6 Sold
Feb-04 08:11
SFRZ5/Z6 4K given at -0.5.
GILTS: Weaker On Canadian Tariff Reprieve
Feb-04 08:10
Gilts sell off at the open, adjusting to Canada’s short-term tariff reprieve that has been covered in detail elsewhere.
- Futures as low as 92.67 before a recovery to 92.80.
- The recent corrective bullish cycle in the contract extended yesterday.
- Initial support and resistance located at the 20-day EMA (92.11) and yesterday’s high (93.54), respectively.
- Yields 1.5-3.0bp higher, curve bear steepens.
- GBP STIRs still operate around pre-gilt open levels, ~80bp of BoE cuts priced through year-end.
- The DMO will come to market with GBP4.25bln of the 4.375 Mar-30 gilt this morning.
- Little else of note on the UK calendar, which will leave focus on cross-asset cues and tariff-related headlines.
- Our BoE preview will be published later today.
