TURKEY: Turkey Scraps Inflation Accounting for 2025 Results
- According to a decree from the Treasury & Finance Ministry, companies will not apply inflation accounting in their 2025 balance sheets. It had been reported in October that the government was mulling scrapping the practice. Turkey introduced inflation accounting for non-financial companies in 2024 after three-year cumulative domestic producer-price growth exceeded 100%. The practice adjusts companies’ financial statements to reflect changes in purchasing power and profitability, and influences how non-monetary assets are taxed.
- Ekonomi run a piece in which they note that TRY-denominated commercial loan rates, which were around 53-55% before the CBRT started reducing rates from 46% in July, are currently at 46-47.5%. While these rates have decreased by around 7.5ppts since April, they still remain well above the 38% policy rate while the decline has been outstripped by the 800bp reduction in the one-week repo rate. Ekonomi attribute this to some unchanged macroprudential measures – namely the monthly growth limit of 2.5% for SME loans and 1.5% limit for other TRY commercial loans.
- President Recep Tayyip Erdogan addresses his party’s members at 11:00GMT/14:00 local time in Ankara. No major data releases are scheduled for today, with real sector confidence and capacity utilisation data for December due tomorrow morning.
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WTI TECHS: (F6) Move Lower Strengthens A Bear Theme
- RES 4: $71.38 - High Jun 23 and a key medium-term resistance
- RES 3: $67.16 - High Jul 30
- RES 2: $65.33 - High Sep 26 and key resistance
- RES 1: $61.84 - High Oct 24
- PRICE: $58.05 @ 07:15 GMT Nov 24
- SUP 1: $55.99 - Low Oct 20 and bear trigger
- SUP 2: $55.33 - Low May 1
- SUP 3: $54.72 - Low Apr 9 and a key support
- SUP 4: $53.53 - 1.764 proj of the Jul 30 - Aug 13 - Sep 26 price swing
The move down last week in WTI futures strengthens a bearish theme. A stronger resumption of the bear leg would pave the way for a move towards key support and the bear trigger at $55.99, the Oct 20 low. Clearance of this level would resume the downtrend. Note that it is still possible a bullish corrective cycle remains in play. Resistance to watch is $61.84, the Oct 24 high. Clearance of this hurdle would signal scope for a stronger correction.
UK FISCAL: Budget: Reeves piece, mansion tax, rail fares, electric cars (2/2)
- The weekend papers covered plans by Reeves to extend the Electric Car Grant scheme which originally had funds of GBP650mln and is said to be extended. The details here are a bit fuzzy - we have seen increases of between GBP1.3bln and GBP1.5bln reported. This is likely to come in alongside the pay per mile scheme to replace VED revenues (vehicle excise duty i.e. car tax).
- On Friday the FT ran a story noting that the GBP2,000 limit to salary sacrifice exemptions from employer and employee NICs would raise between GBP3-4bln. There are no other new details in the story but this is higher than the GBP2bln estimate previously published in The Times when the detailed proposals first broke a couple of weeks ago. Full article here.
- The Telegraph ran with a headline "Reeves's welfare giveaway to top £15bn". There's nothing new in there however, it is just summing up the cost of ending the two child benefit cap, the two welfare reforms since the Spring budget (winter fuel means testing and the watered down welfare reforms) and the inflationary increase in benefits.
GOLD TECHS: Support Remains Intact
- RES 4: $4404.9 - 3.500 proj of the May 15 - Jun 16 - 30 price swing
- RES 3: $4381.5 - High Oct 20 and bull trigger
- RES 2: $4264.7 - 76.4% retracement of the Oct 20 - 28 correction
- RES 1: $4132.9/4245.2 - High Nov 19 / 13
- PRICE: $4054.8 @ 07:20 GMT Nov 24
- SUP 1: $3952.9 - 50-day EMA
- SUP 2: $3886.6 - Low Oct 28 and a reversal trigger
- SUP 3: $3800.00 Round number support
- SUP 4: $3760.9 - Low Sep 29
The downleg in Gold between Oct 20 and 28 appears to have been a correction and allowed a recent overbought condition to unwind. The recovery since Oct 28 does suggest that correction is over. Key support to watch lies at the 50-day EMA, at $3952.9. Clearance of this EMA would signal scope for a deeper retracement. The first short-term bull trigger has been defined at $4245.23, the Nov 13 high.
