Turkey: Consumer inflation likely to stay close to 19% till November – BBVA

Matías Salord FXStreet

Recent data showed inflation in Turkey rose up to 19.25% in August. According to the Research Department at BBVA, consumer inflation will remain near 19% till November, leaving almost no room for an easing form the Central Bank of the Republic of Turkey (CBRT).

Key Quotes:

“Consumer prices increased by 1.12% in August, again being realized above expectations (BBVA Research 0.9%, Consensus 0.7%) on the back of a higher than expected food inflation. Thus, annual consumer inflation rose to 19.25% up from 18.95% the month before. Core inflation continued to weaken and declined to 16.76%, helped by the recent changes in the special consumption tax ranges in personal cars.”

“Although recent stable levels of the exchange rate provide some relief, cost push factors remain on track due to strong commodity prices and supply side problems. Also, still growing domestic demand and worsening inflation expectations facilitate pass-thru over the consumer prices, keeping the risks on the upside for inflation. We expect consumer inflation to stay close to 19% till November and then decline to near 17% at the end of the year, which leaves almost no room for an easing from the CBRT. But, given the recent CBRT communication, we still expect rate cuts in November and December, ending up with a policy rate of 18% at the end of the year.”

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

USD/JPY eyes August swing low, near 155.20 ahead of US NFP

USD/JPY retests the August monthly swing low during the Asian session on Friday as a more hawkish repricing of BoJ rate-hike bets and a suspected intervention continue to underpin the Japanese Yen. Meanwhile, the US Dollar is seen consolidating the previous day's heavy losses amid soft US bond yields, further weighing on the currency pair as traders keenly await the US NFP report.

AUD/USD consolidates above 0.7200; US NFP awaited

AUD/USD holds steady above 0.7200, near its highest level since mid-May, as bulls await the US NFP report for more cues on the Fed's policy path before placing fresh bets. Meanwhile, the recent decline in US bond yields keeps the US Dollar depressed near its lowest level in over a week and acts as a tailwind for the Aussie amid the RBA's hawkish tilt.

Gold tumbles as blockbuster US NFP lift US Dollar, Treasury yields

Gold (XAU/USD) falls sharply on Friday, snapping a two-day recovery after the US Nonfarm Payrolls (NFP) report surprised strongly to the upside. The metal briefly climbed above $4,500 on Thursday, gaining nearly 2%, but has since erased a large part of that advance.

Crypto’s $638 million buyback boom may not be as bullish as it looks

Decentralized Finance (DeFi) protocols reportedly spent $638 million to buy back their native tokens in August, up 17% from a year earlier. On the surface, the buyback trend suggests the cryptocurrency industry is maturing fast, adopting one of Wall Street’s oldest tools to bolster valuations and distribute revenue. The headline becomes less impressive once the number is opened up.

Why hawkish Bank of Japan expectations aren't enough to sustain the Japanese Yen rally

The Japanese Yen (JPY) experienced a sudden burst higher after falling back below the 160.00 psychological mark against the US Dollar (USD) earlier this week amid a more hawkish repricing of Bank of Japan (BoJ) rate hike expectations.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.