Central Bank of Turkey likely to be on hold

In EMEA, many rate decisions would be released next week. The most interesting will be the Turkey MPC meeting. 

"The CBT is expected to remain on hold next week. The CBT announced its roadmap for the simplification of the policy framework in August, and has already started implementing some measures to provide FX liquidity and support financial stability", says Barclays. 

However, with the domestic environment deteriorating and less risk appetite for EMs, gradual simplification of monetary policy has become more complicated. The reactive stance (or higher tolerance) of Turkey's central bank against TRY depreciation suggests risks of delay/interruption to the simplification, particularly given the unknowns at home. 
"On the other hand, a potential hike to the 1-week repo rate (7.5%) at the September MPC is a possibility, given the tighter policy stance implied by the increase in the effective cost of CBT funding since August MPC", forecasts Barclays. 

While this would not affect money market rates, it may still be taken as a positive signal by the market, though this would be short-lived. Overall, it is fairly unlikely that CBT will start hiking rates at the September MPC combined with the Fed delaying normalization of its monetary policy. 

"TRY still does not seem positive and being long USDTRY is recommended through a 3m 1x2 call spread, with strikes at ATMF and 3.35", added Barclays