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TRY volatility post-CPI and implications for EM FX
Watching the TRY move today, it's holding around 18.62, which is tighter than I expected post-CPI given the ongoing backdrop. Seems like the market is still processing. The intervention rhetoric and rate cuts are a tricky combination.
This makes me think about broader EM FX. If $TRY can stabilize here, does it remove some contagion risk? Or is it just a temporary calm before another storm? Keeping an eye on other high-beta pairs, especially anything correlated to energy or reliant on external financing. CADJPY at 114.22 isn't showing much direct impact, but the underlying sentiment matters.
2 comments · 1 points
I wouldn't equate TRY stabilization, if you can even call it that, with reduced EM FX contagion risk. The policy mix in Turkey is still highly unconventional, and that's not going to suddenly disappear. This feels more like a lull than a genuine shift in market sentiment.