TURKEY: CBRT Decision Due, More Moderate Easing Expected
- The CBRT rate decision is due today, at 2pm local time (1200BST), and the Bank is expected to moderate its easing pace from the 250bp reduction delivered last month following the sharp jump in monthly CPI in September.
- That would be consistent with the Bank’s data-dependent forward guidance, while central bank officials have underlined their commitment to ensuring inflation falls in line with the interim targets.
- Among sell-side, analysts lack clear consensus over the outcome of Thursday’s meeting, with estimates ranging from no change to the repo rate to a cut as large as 250bps. Most estimates are skewed towards a 100-150bp move.
- Our full preview including a summary of sell-side analyst views is found here: https://media.marketnews.com/MNICBRT_Prev_Oct25_ea74edf76d.pdf
- Consumer confidence data out this morning came in at 83.6 (Prev. 83.9) - consistent with the pattern of a flattening out of consumer sentiment across H2 this year.
- Erdogan is set to hold further bilaterals and delegation meetings with the Sultan of Oman, while the VP Yilmaz is set to present 2026 central government budget law proposals at the Grand National Assembly.
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FRANCE DATA: PMIs miss expectations; political uncertainty and prices both weigh
The French September flash PMIs came in lower than expected for all: Services at 48.9, 0.7 points below consensus (49.6 consensus, 49.8 prior) and 2.0 points below consensus for manufacturing at 48.1 (50.1 consensus, 50.4 prior), composite output 48.4, 1.3 points below consensus (49.7 consensus, 49.8 prior). Political uncertainty was cited as a concern by many, but prices were also notable for being lower across both inputs and outputs with the first fall in output prices since May.
- "Private sector business activity fell at the quickest rate in five months."
- "Subdued customer demand was noted as a drag on activity levels in both sectors, with survey data signalling a sixteenth successive reduction in total new orders."
- "In some cases, panel members attributed lower client interest to domestic political uncertainty. Export conditions remained unsupportive, although the rate of contraction in new export business slowed fractionally since August to its weakest for three months."
- "Political turbulence in France led some panellists to lower their expectations for business activity, while others foresee challenging demand conditions and competitive pressures as risks to the outlook."
- Input costs at a 5-month low.
- "Both manufacturers and service providers recorded weaker rises in operating expenses."
- "As for prices charged, both sub-sectors were aligned with discounting in September amid reports of strong competition. At the composite level, this marked the first month of lower selling prices since May."
CROSS ASSET: French PMIs miss expectations
- A miss across the board for France, but a fairly limited impact so far across multi assets.
- On the margin, the EUR was the most notable mover, albeit just a 18 pips fall against the USD, and well within the earlier ranges.
USDCAD TECHS: Remains Above Support For Now
- RES 4: 1.4019 38.2% retracement of the Feb 3 - Jun 16 bear leg
- RES 3: 1.3925 High Aug 22 and the bull trigger
- RES 2: 1.3890 High Sep 11
- RES 1: 1.3848 High Sep 15
- PRICE: 1.3838 @ 08:13 BST Sep 23
- SUP 1: 1.3727 Low Aug 29 and a bear trigger
- SUP 2: 1.3709 61.8% retracement of the Jul 23 - Aug 22 bull cycle
- SUP 3: 1.3658 76.4% retracement of the Jul 23 - Aug 22 bull cycle
- SUP 4: 1.3637 Low Jul 25
A sharp sell-off in USDCAD early last week resulted in a break of the 20-and-50-day EMAs. This undermines a recent bullish theme and exposes key short-term support at 1.3727, the Aug 27 low. A clear break of this level would strengthen a bearish threat and signal scope for a deeper retracement. For bulls, the pair is off its recent lows. Resistance levels to watch are; 1.3890, the Sep 11 high, and 1.3925, the Aug 22 high and bull trigger.
