All eyes on Turkish CB with accelerated depreciation in Lira (basket all time high) after dovish MPC last week, market scepticism on unorthodox monetary policy and jittery global markets. CBRT could slash/suspend daily $30mn FX purchase auctions and/or lift ultra-low 1.50% O/N bid rate/narrow corridor. Also important is this week’s 3Q inf. report on Thursday to see if CBRT changes base-case scenario to one that “deepening of developed market problems to lead to stagnation in domestic economy”, which calls for loosening in all policy instruments. CBRT also meets investors in pre-scheduled meeting on Fri. With continued TRY depreciation, next channels to watch are inf. (FX pass-thru), rates, confidence/expectations/import demand/growth.
Israel: MPC meeting today at 15:30, no change expected in 3.25% policy rate. Hungary: MPC meeting tom., no change expected in 6.00% policy rate
HSBC Global Research