EM CEEMEA CREDIT: Turkiye: Expectations for rate cut in July

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• The greenback is slipping against all others early Monday, turning focus back to the recent lows and bear trigger for the USD Index at 97.921. A close at today's lows would mark a resumption of the S/T downcycle, narrowing the gap with the bear trigger to just 0.75%. The formation of a bearish engulfing daily candle on Thursday last week adds to the S/T downside focus.
• Trump's doubling of aluminum & steel tariffs on Friday have countered any building hopes that tariffs could be fading as a primary policy tool, even as the likes of the EU are granted reprieves and delays to the onset of major levies. Risk sentiment has been dented as a result, as markets assess the latest geopolitical concerns regarding the Russia/Ukraine conflict and tariff related developments between the US and China.
• The prevailing trend of greenback weakness has resumed, prompting USDJPY to extend its pullback from last Thursday’s 146.28 high. This leaves spot trading below 143.00 once more and a continuation lower would expose 142.12, the May 27 low. Clearance of this level would resume the bear leg and signal scope for a move towards a key medium-term pivot around the 140.00 mark.
• The Yen is notably outperforming the Swiss Franc, prompting a 0.35% move lower for CHFJPY. While this cross remains in the middle of the May range, spot continues to find good resistance around the 176.00 handle. Further weakness would raise attention on the key 50-day EMA support, intersecting at 173.35, an average we have not closed below since mid-March.
• Focus for the remainder of the session rests on May ISM Manufacturing data, with the employment subcomponent in particular focus ahead of Friday's nonfarm payrolls print. Markets are on watch to see whether today's print mirrors that of the MNI Chicago PMI on Friday, which came in well below expectations. Speakers due today include Fed's Logan, Goolsbee & Powell as well as BoE's Greene & Mann.