Page 7 - TURKRptApr21

2.0 Politics 2.1 Watchlist
● Global liquidity: The market stress has not dissolved.
● Virus lockdowns and demand conditions in Europe
● Joe Biden has not called Erdogan yet but foreign ministers met at Nato summit. The Biden administration wants to bring Erdogan as low as possible but Erdogan would play them like a fiddle when he manages to get his claws into them over some “transactional” partnerships.
● DELAYED: Halkbank court hearing. Higher court’s decision is awaited. The case stays politicised.
● April 24: This month. Biden will most probably call Armenian Genocide as massacre but it is a test of his Turkey policy.
● March 25-26 EU Council Summit: Even did not make noise in markets.
● September 26: Elections in Germany.
● Corona: Tourism season opening in April not promising.
● On April 5: March official inflation release. First inflation data release after the central bank shake-up.
Signals on when the policy rate will be cut.
The earliest chance the officials have to make the case that inflation has entered into a declining trend will come in May (according to market expectation and basic calculations on official data series), ceteris paribus.
The May inflation reading will be released on June 3, but Erdogan may launch a rate-cutting process earlier.
On March 25, local business daily Dunya, which can be considered the voice of the Turkish real sector, reported that all industries, from textiles and automotive to furniture, chemicals, plastics, food and construction are getting ready for another surge of huge price hikes following the fresh currency depreciation that has added to already booming commodity prices, supply shortages and logistics problems.
Current market expectations suggest an end-2021 official inflation at over 10% while the central bank has a 9.4% target, just shy of double digits.
● April 15: Monetary policy committee meeting decision at 14h Istanbul time.
March 18: Hiked to 19%.
● Lira loans flow: Fastening.
● USD/TRY: Back to back-door interventions. It is watched when the dam breaks again.
7 TURKEY Country Report April 2021 www.intellinews.com