TURKEY: Paying Down Foreign Debt Clearly a Priority
Aug-07 07:10
- Funding acquired via domestic borrowing has now become the primary source for paying off external debt, according to analysis by Ekonomi. They write that this year the Treasury, which borrowed $8.5bln externally, paid down $13bln in debt - thereby covering the deficit with domestic borrowing.
- Much domestic focus remains on inflation turnouts through the rest of 2025, with Yeni Safak writing that while many forecasts are optimistic for year-end inflation to fall below 30% - the requirement of monthly inflation rate holding at, or below, 1.6% is highly questionable. Separately, Servet Yildirim at Ekonomi writes that for commercial loan rates to fall on a permanent basis, markets still require conviction in the downward trend for price inflation. Only at this point will the CBRT be able to ease credit restrictions on credit supply and loosen reserve requirements.
- Cash budget balance data is the sole release Thursday, with industrial production, current account data and retail sales to follow next week.
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BUNDS: The German 10yr Yield is testing that 2.671% level
Jul-08 07:10
- Treasuries are getting dragged by {ge} German Govies, Bund is sold in 5k through the low, but so far still finding some support at the 2.671% mark.
- As noted on the Bund Open, and with no data for the Session, supply is at the forefront on both sides of the Pond. Netherlands, Bobl and US 3yr are due Today.
- Next support in Bund would be at 2.701% which equates to 129.43 Today.
USDCAD TECHS: Southbound
Jul-08 07:08
- RES 4: 1.3920 High May 21
- RES 3: 1.3862 High May 29
- RES 2: 1.3798 High Jun 23
- RES 1: 1.3685/3766 High Jul 7 / 50-day EMA
- PRICE: 1.3651 @ 08:08 BST Jul 8
- SUP 1: 1.3557 Low Jul 03
- SUP 2: 1.3540 Low Jun 16 and the bear trigger
- SUP 3: 1.3503 1.618 proj of the Feb 3 - 14 - Mar 4 price swing
- SUP 4: 1.3473 Low Oct 2 2024
Short-term gains in USDCAD are considered corrective and bears remain in the driver’s seat. Pivot resistance at the 50-day EMA, at 1.3766, is intact. A clear break of the average would signal scope for a stronger recovery. Sights are on key support and the bear trigger at 1.3540, Jun 16 low. Clearance of this level would resume the downtrend and open 1.3503, a Fibonacci projection.
EU-BOND SYNDICATION: New 7-year Dec-32 / 3.75% Oct-45 tap: Books open
Jul-08 07:01
New 7-year Dec-32 EU-bond
- Size: E5bln (MNI expected E5-7bln, we still look for possible E6bln)
- Guidance: MS + 37bps area
- Coupon: Short first coupon
- Maturity: 13 December 2032
- ISIN: EU000A4ED0K0
3.75% Oct-45 EU-bond tap:
- Size: E3bln (MNI expected E3-5bln, we still look for possible E4bln)
- Guidance: MS + 97bps area
- ISIN: EU000A4EA8Y7 (immediately fungible)
For both:
- Settlement: 15 July 2025 (T+5)
- JLMs: BNP Paribas, Citi, Deutsche Bank (DM/B&D), J.P. Morgan, Nomura
- Timing: Books open, pricing later today
From market source
