Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
U.S. Treasury Yields Expected to Decline Amid Cooling Economic Pressures 
China’s Growth Faces Structural Challenges Amid Doubts Over Data 
Japan Services Producer Prices Rise 3.2% in June, Supporting BOJ Rate Hike Expectations 
Energy Sector Outlook 2025: AI's Role and Market Dynamics 
Japan Economy Minister Downplays Inflation Risks Despite BOJ Warning 
Indonesia Surprises Markets with Interest Rate Cut Amid Currency Pressure 
China Holds Loan Prime Rates Steady for 14th Month as Economic Recovery Remains Uneven 
Singapore Central Bank’s Exchange Rate Policy Explained: Why MAS Uses the S$NEER Instead of Interest Rates 
U.S. Stocks vs. Bonds: Are Diverging Valuations Signaling a Shift? 
European Stocks Rally on Chinese Growth and Mining Merger Speculation 
Stock Futures Dip as Investors Await Key Payrolls Data 
Lithium Market Poised for Recovery Amid Supply Cuts and Rising Demand 
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It is quite surprising that the lira not rallying at all on Friday following the release of Pastor Andrew Brunson. In our preview of the court case, we had anticipated USDTRY to fall even as far as 5.50 in the event of a positive outcome – but this did not occur. The topic became debatable later yesterday as the lira indeed began to rally strongly.
In our stance, this rally can continue until 25 October in particular, because CBT is likely to additionally hike rates by another 300bps on that day. This is the next milestone for now. If the central bank does not disappoint, the lira could remain stable for longer. If, however, CBT gets complacent because of the ongoing lira rally and hikes less, or leaves rates unchanged, the lira weakness is very likely to resume.
We remain UW TRY in the GBI-EM model portfolio. The authorities have now delivered steps in the right direction but many challenges remain. Inflation surprised significantly to the upside in September and the large debt burden is still likely to cause renewed bouts of stress, in our view.
At spot reference: 5.7715 levels, contemplating above driving factors, on hedging grounds we initiate RV trade - 3m USDTRY put up-and-in Short 1m put. Courtesy: JPM, Commerzbank
Currency Strength Index: FxWirePro's hourly USD spot index has shown -103 (which is bearish), while articulating at 14:16 GMT.
For more details on the index, please refer below weblink:
