TURKEY: MNI CBRT Review – September 2025

• “Our call for a Riksbank August rate cut has been challenged by high summer inflation prints. We believe this outweighs concerns over weak economic activity, leading us to expect the Riksbank to hold rates in August”.
• “Although some economic indicators have come in weaker than expected, this is unlikely to prompt immediate policy action in the current inflation environment. At its August meeting, the board also lacks updated staff forecasts, which may be needed to assess the outlook with enough confidence to look past the current inflation overshoot”.
• “A full report also offers additional scope to explain the rationale for a rate cut even as inflation remains elevated. Lastly, with the markets pricing a low probability – less than 10 percent – of an August rate cut, a pause could be in line with monetary policy and contribute to stability in turbulent times”.
• “We forecast that the Riksbank will deliver another rate cut in September to support economic activity and guard against inflation falling too far going forward”.

Nomura late yesterday switched to calling for a 25bp cut in September after TD Securities did so earlier in the day, as analysts increasingly shift toward market pricing (24bp priced vs 21bp pre-CPI and 12bp pre-NF). Nomura’s terminal of 3.5-3.75% is still more hawkish than SOFR eyeing an effective rate of ~3.05% in SFRH7. 

• Nomura: “We now expect the FOMC will cut 25bp at the upcoming September meeting. Inflation risks are still skewed higher, but with core PCE tracking the Fed’s 3.1% year-end forecast, we expect the Fed will ease in line with the June dot plot. A 50bp cut in September remains unlikely, in our view. The labor market is slowing, but there are few signs of stress, and broader financial conditions remain easy.”
• They then see 25bp cuts in Dec and Mar for a terminal range of 3.5-3.75%
• TD Securities: “We are bringing forward the restart of the Fed's easing cycle from October to September, but keeping the same pace of rate cuts that we had previously assumed. We are looking for additional 25bp cuts in October and December — as the Fed recalibrates its policy stance closer to neutral — followed by a more gradual 25bp quarterly easing path in 2026.”

Analysts already in the September cut camp prior to yesterday’s CPI include: 

• BMO, Citi, Commerzbank, Danske, GS, ING, JPM, StanChart, Wells Fargo

Equity Option Expiry for Friday in Notional Term, Gamma Volatility could come into play at and post respective expiries.

Still, these are far larger during Quarterly Expiries, triple witching days:

• SPX: $1.31bn vs $1.29T (Tuesday).
• NDX: $58.50bn vs $54.97bn.
• Amazon: $19.25bn vs $18.40bn.
• Apple: $20.13bn vs $19.56bn.
• SX5E: €150.88bn vs €150.77bn.
• SX7E: €3.22bn vs €3.26bn.
• DAX: €22.92bn vs €22.38bn.
• UKX: £9.39bn vs £9.47bn.