RBA Signals More Rate Hikes Possible as Australia Battles Stubborn Inflation 
Wall Street Analysts Weigh in on Latest NFP Data 
Stock Futures Dip as Investors Await Key Payrolls Data 
US Futures Rise as Investors Eye Earnings, Inflation Data, and Wildfire Impacts 
Goldman Predicts 50% Odds of 10% U.S. Tariff on Copper by Q1 Close 
UBS Predicts Potential Fed Rate Cut Amid Strong US Economic Data 
BOJ Rate Decision in Focus as Sticky Inflation, Weak Yen Shape USD/JPY and Nikkei Outlook 
BOJ Expected to Hold Rates Steady While Signaling More Hikes Ahead 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
Indonesia Surprises Markets with Interest Rate Cut Amid Currency Pressure 
U.S. Treasury Yields Expected to Decline Amid Cooling Economic Pressures 
Chile Central Bank Holds Interest Rate at 4.5% as Inflation and Global Risks Persist 
Mexico's Undervalued Equity Market Offers Long-Term Investment Potential 
Oil Prices Dip Slightly Amid Focus on Russian Sanctions and U.S. Inflation Data 
BSP Sees Philippine Inflation Easing, Keeps Policy Options Open 
Australia Inflation Cools as Core CPI Misses Forecasts, Easing RBA Rate Hike Pressure 
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The Turkish lira (TRY) surged after Erdogan claimed triumph in the weekend’s Turkish presidential election. After much ado about how AKP’s and Erdogan’s ratings had begun to falter ahead of the election, the incumbents performed much better than polls had indicated and the opposition alliance bit the dust. Erdogan won the presidency in the first round itself (with 52.5% of the vote) and the AKP-MHP alliance achieved a wide 57% majority of the parliament.
While this outcome is positive for producing a relatively stable government, the risks to the central bank and monetary policy, and hence, the lira outlook have multiplied. Our FX Hotspot from earlier today recaps the main points.
While we hold off moving UW with the CBRT surprising once again. The aggressive 500bps of tightening cumulatively delivered since April 25th is supportive for the currency in the first instance, however, we see a portion of it as merely “catching up”, with inflation accelerating.
Contemplating above driving factors, on hedging grounds we initiate RV trade - 3m USDTRY put up-and-in Short USDTRY.
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