Pros REER based TRY undervaluation: 47% National Bank stepped in to protect TRY Key to this position: limited market volatility and risk-on sentiment It is relatively expensive to short the TRY
Cons Long-term fundamentals gloomy for Turkey
Yorum
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Tomorrows CBT interest rate decision critical risk-event. Market is pricing a hike of roughly 50-75 bps on average, anything below that means TRY under attack again.
Yorum
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Setup playing out well: Turkey announces a 125bp hike in the repo rate, thats more than expected, lira on the frontfoot
Emir iptal
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No positioned opened on this setup, very speculative, hard to build an edge on a market where Central Banks can intervene at any moment.