Weak industrial production to affect Turkish Lira

Turkey's recent industrial production data disappointed in September as the output growth recorded  a sharp fall of 2.8% y/y against 7.2% y/y in previous month.

The data indicates the economy fell into serious recession ahead of the November re-election. Analysts anticipates weaker GDP growth in Q3, expected to release next month. 

The result of the election of course holds new promise for business and consumer confidence -- and analysts anticipate a solid growth in the PMI and fixed investment spending once a new economic policy agenda is in place. 

"Such concerns are playing a role in the market as can be seen from the lira's shaky behaviour in recent days; the lira has reversed its post-election rally entirely. We see USD-TRY at 2.90 at end-December", says Commerzbank.