TURKEY: JP Morgan Lower End-2025 Policy Rate Forecast Following May CPI
Jun-04 09:01
- JP Morgan have lowered their end-25 policy rate forecast to 36.0% (previously 38.0%). They note that the CBRT maintained its hawkish bias in its latest MPC statement and interpret this hawkish forward guidance as an indication of a potential pause in the upcoming MPC meeting scheduled for June 19.
- While JPM expect the CBRT to keep the policy rate and overnight lending rates unchanged, they anticipate that the Bank will move its funding rate from the overnight lending rate of 49% to the one-week repo rate of 46% towards the end of this month. They also expect the interbank lira reference rate (i.e. TLREF) to fall towards 46% at the end of June from 49% currently.
- Following the lower-than-expected May CPI, JP Morgan expect larger rate cuts from the CBRT in 2H25. After a pause in June, they see the CBRT cutting 250bps at each MPC meeting (previously 200bps) starting from July to 36.0% by end-25 (previously 38.0%). JPM acknowledge the risk of smaller rate cuts due to political uncertainty.
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AUD: Another push higher for the Aussie
May-05 08:57
- The Aussie finds another round of demand, the G10 worst performers are the USD, CAD, GBP and the SEK in that order.
- The AUD is up across all the majors, putting aside the TWD which is up 1.60%, with Overnight desks suggesting some Exporter demand in TWD.
- Next immediate support in EURAUD is seen at 1.74536 (prices are according to Bloomberg), the very short term 76.4% retracement taken from the 2nd April Tariffs day.
(Chart source: MNI/Bloomberg).
OPTIONS: Expiries for May05 NY cut 1000ET (Source DTCC)
May-05 08:53
- EUR/USD: $1.1073(E2.4bln), $1.1100($1.5bln), $1.1120-25(E1.1bln), $1.1190-00(E2.0bln), $1.1285-00(E3.0bln), $1.1400(E636mln)
- GBP/USD: $1.3100-20(Gbp529mln)
- EUR/GBP: Gbp0.8525(E740mln)
- AUD/USD: $0.6500(A$509mln), $0.6550-60(A$1.0bln), $0.6635-45(A$1.1bln)
- USD/CAD: C$1.3865-70($2.6bln)
COMMODITIES: M/T Bearish WTI Trend Continues
May-05 08:51
A medium-term bearish trend in WTI futures remains intact and last week’s sell-off reinforces this theme. The move down signals the end of the correction between Apr 9 - 23. Gold is trading closer to its recent lows and a corrective cycle remains in play for now. The yellow metal has breached the 20-day EMA. A continuation lower would highlight a deeper retracement and open the 50-day EMA, at 3115.11.
- WTI Crude down $1.11 or -1.9% at $56.9
- Natural Gas up $0.07 or +1.82% at $3.694
- Gold spot up $39.01 or +1.2% at $3273.76
- Copper up $7.1 or +1.52% at $474.65
- Silver up $0.37 or +1.16% at $32.373
- Platinum up $2.32 or +0.24% at $968.34
