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A quick overview of the pre-market crude oil prices (converted between domestic and international markets) in one chart.April 20th - According to a report released Monday by Statistics Canada, gasoline prices rose 21.2% month-over-month in March, the largest increase on record, driven by global oil price increases due to the conflict in the Middle East. Meanwhile, natural gas prices fell 18.1% month-over-month, curbing the upward trend in energy prices. Statistics Canada noted that natural gas prices are heavily influenced by North American supply, "and therefore less sensitive to global price fluctuations."April 20th - The Bulgarian Central Election Commission announced on the afternoon of April 20th local time that 98.78% of the votes in the parliamentary elections had been counted by 2 PM that day. Statistics released by the Central Election Commission show that the Progressive Bulgaria coalition led by former President Rumen Radev won 44.659% of the vote, significantly leading other parties and coalitions. Four other parties and coalitions also received more than 4% of the vote, meaning they also qualified for parliament.April 20th - Canadas annual inflation rate surged to 2.4% in March, reaching its highest level since the end of last year, primarily due to soaring gasoline prices caused by the Iran war. Canadas March CPI rose 0.9% month-on-month, the largest increase since February 2025, but below the market consensus of 1.1%.April 20th - Germany hopes the EU will place the transition to clean energy at the heart of its upcoming carbon market review. This comes after rising energy and fuel prices have drawn criticism of the regions key climate tools. In July, the European Commission will propose amendments to the EUs carbon emissions trading system, aligning it with a new target of reducing greenhouse gas emissions by 90% from 1990 levels by 2040. According to a document, Berlin hopes for targeted revisions to the cap-and-trade scheme to enhance the EUs competitiveness and protect its industrial base. This includes revising benchmarks that determine the free emission allowances available to each sector; simultaneously, the pace of emission reductions will be slowed to prevent price spikes in the 2030s. Meanwhile, Germany supports industrial development by gradually phasing out free emission allowances, which allow certain sectors to emit carbon dioxide without paying for it.

USD/TRY reestablishes its annual high on route to 17.00, notwithstanding Erdogan's expectation of future inflation moderation

Alina Haynes

Jun 06, 2022 15:25

 截屏2022-06-06 下午3.23.52.png

 

In spite of Turkish currency (TRY) traders' inflation worries and President Erdogan's efforts to appease TRY purchasers, the USD/TRY continues to trade near $16.36, the highest level since 2022. The pair's upward momentum is influenced by Friday's high Turkish inflation data for May, as well as the US dollar's comeback over the last week, not to mention expectations of the Fed's faster/more aggressive rate rises.

 

According to Reuters, "Turkish President Tayyip Erdogan stated on Sunday that inflation numbers from the month of May, when annual consumer prices soared to a 24-year high, indicate that inflation is now on the down." It is noteworthy that the May inflation rate for Turkey increased to 73.5 percent in the most recent report.

 

Reuters also reported that the lira fell by 44 percent last year and has been the poorest performer in emerging markets for several consecutive years, mostly owing to economic and monetary policy worries under the administration of President Tayyip Erdogan.

 

In contrast, the odds supporting a 0.50 percent rate hike by the Federal Reserve in September have lately increased to 75 percent from 35 percent a week earlier, which emphasizes this week's US Consumer Price Index (CPI) data and favors US dollar purchasers. In spite of this, the US Dollar Index (DXY) reversed a two-week downward trend at Friday's close, trading down 0.14 percent intraday near 102.000 as of press time.

 

US Nonfarm Payrolls (NFP) for May came in at 390K, above expectations of 325K but falling short of the upwardly revised prior readings of 428K. In addition, the unemployment rate stayed constant at 3.6% against predictions of a minor reduction to 3.5%. In addition, the US ISM Services PMI dropped to 55.9 in May, compared to the market estimate of 56.4 and the flash reading of 57.1 in April. Following the release of the statistics, Loretta Mester, president of the Federal Reserve Bank of Cleveland, stated that the Fed's only worry is inflation. The officials underlined that the likelihood of a recession has increased.

 

Wall Street benchmarks finished in the negative and US 10-year Treasury rates saw their first weekly increase in three weeks to reflect the risk-averse sentiment of the previous day. However, S&P 500 Futures increased by 0.5 percent to 4,126 and US 10-year Treasury rates fell by 1.3 basis points (bps) to 2.942 percent as per the most recent data available.

 

Amid a pre-Fed blackout for Fed officials and in anticipation of Friday's US CPI, USD/TRY traders should pay attention to risk drivers moving forward.

Technical Evaluation

A successful breach of the prior resistance line from early January, about 16.45 at the time of publication, would lead USD/TRY values toward the $17.00 mark before testing the late 2021 top at $18.36.


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