US Futures Rise as Investors Eye Earnings, Inflation Data, and Wildfire Impacts 
Trump’s "Shock and Awe" Agenda: Executive Orders from Day One 
U.S. Banks Report Strong Q4 Profits Amid Investment Banking Surge 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
Lithium Market Poised for Recovery Amid Supply Cuts and Rising Demand 
Goldman Predicts 50% Odds of 10% U.S. Tariff on Copper by Q1 Close 
European Stocks Rally on Chinese Growth and Mining Merger Speculation 
UBS Projects Mixed Market Outlook for 2025 Amid Trump Policy Uncertainty 
Bank of Japan Governor Signals Gradual Progress Toward 2% Inflation Target 
U.S. Treasury Yields Expected to Decline Amid Cooling Economic Pressures 
Goldman Sachs Raises ECB Rate Hike Forecast Amid Persistent Energy-Driven Inflation 
Indonesia Surprises Markets with Interest Rate Cut Amid Currency Pressure 
Gold Prices Slide as Rate Cut Prospects Diminish; Copper Gains on China Stimulus Hopes 
UBS Predicts Potential Fed Rate Cut Amid Strong US Economic Data 
Paraguay Central Bank Holds Interest Rate at 5.5% Amid Slowing Growth 
The moment of truth will strike for the Lira on 24th July. Because then the next interest rate decision of the central bank is due.
The Central Bank of Republic of Turkey raised its benchmark interest rate by 125bps to 17.75 percent on June 7th, after a surprise 300bps hike last month to support the lira. Also, policymakers said further monetary tightening will be delivered, if needed. Latest data showed the country's annual inflation jumped to 12.15 percent in May, the second-highest since February 2004, due to higher energy prices and a tumbling currency.
If, at the end of July, what President Erdogan said yesterday proves true, namely that interest rates will fall in the period ahead, the collapse of the lira we saw yesterday is probably just a ridiculous copy of what it might face on 24 July. In this case, capital controls might prove to be unavoidable.
While this outcome is positive for producing a relatively stable government, the risks to the central bank and monetary policy, and hence, the lira outlook have multiplied. Our FX Hotspot from earlier today recaps the main points.
While we hold off moving UW with the CBRT surprising once again. The aggressive 500bps of tightening cumulatively delivered since April 25th is supportive for the currency in the first instance, however, we see a portion of it as merely “catching up”, with inflation accelerating.
At spot reference: 4.8350 levels, please be noted that the positively skewed IVs and forward rates of 1m USDTRY contracts indicate mounting bullish risks (refer above nutshell for IV skews and forward rates).
Despite today's bearish swings, USDTRY edging higher all-time highs, contemplating above driving factors, on hedging grounds we initiate RV trade - 3m USDTRY put up-and-in Short 1m put.
Currency Strength Index: FxWirePro's hourly USD spot index has shown 73 (which is bullish) while articulating at 12:40 GMT.
For more details on the index, please refer below weblink:
