TRY: Lira Steadies After Partially Paring CBRT-Inspired Gains
- USDTRY trades 2.50% higher at typing, with the ~26.50 region providing moderate intraday resistance. The pair still sits 2.50% lower compared to pre-CBRT levels though is above the 50-day EMA at 25.90.
- The benchmark equity index stands slightly higher on the day, shy of both yesterday’s highs and record highs printed earlier in the week. Turkish equities pared losses yesterday to close the session lower after the knee-jerk move higher in the wake of the central bank decision. The banking sector sub index was more resilient, potentially buoyed by the prospect of greater foreign inflows, and stands 0.50% higher today and within range of record highs seen earlier this month.
- Elsewhere, Turkey’s USD bonds are little changed on the day.
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EUROZONE: Little Disinflationary Progress Expected In July
From our July Eurozone inflation preview (published yesterday, PDF here):
- We await a published consensus for July flash inflation out next Monday - the figures below are from the initial analyst previews we have seen.
- A 5.4% core HICP outturn per the MNI median of analysts (range of 5.2-5.7%) would represent only limited disinflation from June's 5.5%. While we haven't seen many estimates for monthly inflation, a 5.4% Y/Y core reading would imply around 0.4% M/M - in other words, little or no discernible downturn vs June's 0.4%.
- Headline is seen decelerating more sharply, to a median 5.2% Y/Y from June's 5.5% (with a relatively narrower range of estimates from 5.1-5.3%).
Source: MNI July Eurozone Inflation Preview
US: MNI POLITICAL RISK - McCarthy Considers Biden Impeachment
- House Republicans will today weigh-up an impeachment enquiry into President Biden over allegations of financial misconduct. House Speaker Kevin McCarthy (R-CA) told reporters yesterday that an “impeachment inquiry is not impeachment,” but the move may be a politically expedient concession to his conservative flank as he attempts to legislate FY2024 spending bills.
- Former Treasury Secretary, Larry Summers, has warned that the “manufacturing-centered economic nationalism” of President Biden’s economic agenda is, “increasingly dangerous.”
- Commerce Secretary Gina Raimondo and Secretary of State Antony Blinken have warned of the dangers of Artificial Intelligence in a Financial Times op-ed.
- The Senate voted yesterday to add a measure to the National Defense Authorization Act which would subject US investments in China to new requirements.
- UPS and unionised workers represented by the International Brotherhood of Teamsters yesterday reached an agreement in principle on a new contract.
- Florida Governor Ron DeSantis (R-FL) has laid off a third of his staff as his tries to rescue a flagging presidential bid.
- Poll of the Day: Six Republican candidates appear to have qualified for the first GOP primary debate on August 23.
BUNDS: Coiling Ahead Of Event Risk
Bund futures sit close to 20 ticks off worst levels of the day, last showing -20 or so, while the broader German cash curve sees some light bear flattening as the major benchmarks run 3-4bp cheaper. News flow has been light since our previous update. Tepid reception at the auction representing the opening of the new 7-Year line wouldn’t have done the move any harm. Technically, futures consolidate between the immediate horizontal lines in the sand, off last week’s peak. The recent retracement appears to be a correction and short-term trend signals highlight a bull cycle.
