RBA Unlikely to Cut Interest Rates in 2026 as Inflation Pressures Persist, Says Westpac 
ECB Signals Steady Rates Ahead as Policymakers Warn of Inflation Risks 
Japan Inflation Holds Firm in November as BOJ Nears Key Rate Hike Decision 
Chinese Robotaxi Stocks Rally as Tesla Boosts Autonomous Driving Optimism 
BOJ Expected to Deliver December Rate Hike as Economists See Borrowing Costs Rising Through 2025 
Trump Orders Blockade of Sanctioned Oil Tankers, Raising Venezuela Tensions and Oil Prices 
Japan Exports to U.S. Rebound in November as Tariff Impact Eases, Boosting BOJ Rate Hike Expectations 
Asian Markets Rebound as Tech Rally Lifts Wall Street, Investors Brace for BOJ Rate Hike 
U.S. Stocks End Week Higher as Tech Rally Offsets Consumer Weakness 
Fed Near Neutral Signals Caution Ahead, Shifting Focus to Fixed Income in 2026 
Central Bank of Turkey (CBT) meets Tuesday to decide monetary policy and is likely to hike the benchmark repo rate by 50 bp to 8.50 percent.
Turkey has exceeded its inflation target of 5 percent for a very long time. It has indeed recorded close to double-digit inflation in many years. According to data released by Turkish Statistical Institute and Central Bank of the Republic of Turkey, Turkey's consumer confidence index rose 5.6 percent sequentially to 66.9 in January from December’s 63.4.
Last week, a research paper by CBT staff estimated that average lira pass-through per year in recent years has been around 15 percent. Ongoing lira sell-off has caused domestic manufacturing prices to accelerate from just 10 percent y/y as recently as in November 2016 to around 50 percent y/y now.
CBT's reluctance to maintain a clearly positive real interest rate is adding 15 percent-pts of inflation pressure. It is hence crucial that CBT act decisively soon to stop this spiral. Should the CBT disappoint expectations, the lira is likely to come under renewed depreciation pressures in the sessions ahead.
“We think it will hike 50 bp, even though it SHOULD hike by 100 bp. The bank is also expected to hike the top of the rates corridor by 75 bp and the bottom by 25 bp,” said Research team at BBH in a report.
