EM CEEMEA CREDIT: T.C. ZIRAAT BANKASI $BMK PNC5.5 AT1 - IPT

Little change in the major German swap spreads & ASWs on the day, with bond yields essentially flat as German FI stabilises away from session lows that came around the time that the German regional CPI data crossed (data was in line to slightly firmer than expected).

• The major swap spreads & ASWs have edged higher in recent days, with outright bonds also firming, but remain within their respective multi-month ranges, aided by some risk-negative inputs (most recently the increase in U.S. government shutdown odds).
• This backdrop, coupled with relatively benign funding market conditions, has promoted steady outperformance for bonds vs. swaps.
• On the funding market front, Commerzbank note that “repo markets remain calm with the quarter-end being digested very smoothly, specials and GC richening modestly over the reporting date, while large movements remained absent.”

• Rising odds of a US government shutdown following the remarks from VP Vance have continued to weigh on the US dollar to start the week. USDJPY has been hardest hit, extending the week’s pull lower to around 1.3% at typing as spot consolidates back below 148.00.
• The move down appears technically corrective and initial support to watch lies at 147.59, the 50-day EMA. Stronger pivot support has been defined at 145.49, the Sep 17 low.
• We did highlight GBPJPY as a potentially vulnerable candidate to further yen demand, and the significance of the 50-day EMA. The cross is currently attempting to break below the average, which intersects at 198.98, and the next downside target would be 195.04, the August low.
• While the US shutdown and potential implications for US data releases remains the focus, it is worth highlighting that overnight the BOJ released the summary of opinions. The disclosures gave no clear signal of an October move, with most members aside from Naoki Tamura and Hajime Takata – who dissented and proposed a hike – seeing little urgency.
• Still, some members cited diminishing external risks and rising domestic pressures as reasons to shift. "Given this, the Bank may return to its monetary policy stance to raise the policy interest rate, and adjust the level of real interest rates that are currently low compared with overseas economies.”

• Just over a $60 reversal in Gold after it printed a new all time record high just short of $3900.00, managed a $3871.72 high.
• There was a couple of quick lower legs that could suggest some profit taking, or some long cover, the first circa $3838.00 and the second around $3825.00.
• Gold is eyeing a test back down to $3800.00.
• As Oppose to the Dollar, it seems that the fast leg lower in Platinum and now Palladium and Silver may have helped.