News
KZ: Neutral – Govt sees little changes after the elections (p2)
Today’s Events
CR: Dec unemployment / RO: RON300mn 182D T-Bill auction / RU: Dec PPI, Dec unemployment / TK: 2016 GB and 2021 IL GB auctions
EEMEA Markets
Weekend newsflow: today all eyes will remain on the Greek PSI talks. IIF’s Dallara said that private creditors have made their final offer regarding the losses they are willing to accept (according to the FT, 65%-70% of NPV). The ball is now in the court of the European official creditors and the IMF.
Turkey bond auctions: today the Turkish Treasury will auction 5y TURKGB (9% 2016) and 10y CPI linked papers. During the last 2weeks Turkish local currency bond yields recovered sharply following the December sell-off on the back stabilizing TRY. As we highlighted in the Curves and Crosses Strategy publication last week the Central Bank of Turkey continues to control the TRY via open FX intervention and squeezing money market liquidity. This has resulted in a sharp rise of TRY implied rates which in turn makes the lira the highest yielding EM currency. This is despite the fact that the Turkish policy rate is low at 5.75%. Tomorrow the CBT will hold rate setting meeting where we expect unchanged rates but a confirmation of the current tight liquidity policy. We think this backdrop makes the long end of the curve more attractive as it is relatively insulated from the liquidity swings at the short end. In this vein we prefer keeping long dated TURKGBs and would consider participating either at today’s 5y TURKGB or tommorrow’s new 10y bmrk TURKGB auction.
Romania: today RON300mn 6M t-bill paper will be auctioned. We expect strong demand, auction size likely increased and yields around 5.55-5.75%.
Click here to read the full report: EEMEA Eco Daily 230112
Gyula Toth
UniCredit Research