USD/TL is trading just below its historical peak
While the Turkish Lira lost 1 percent of its value last week due to the global search for a safe haven, the dollar/TL started the day just below historical highs.
The Investment Environment Improvement Coordination Board meeting, Treasury borrowings, geopolitical developments and the data agenda will be monitored in the markets today.
After rising to a new peak of 33.67 last week due to global selling pressure, the USD/TRY started the day around 33.56 this morning. After losing 1.1 percent against the USD last week, the TRY has remained flat this week.
GEOPOLITICAL CONCERNS
As tensions rise in the Middle East following the killing of senior members of Hamas and Hezbollah, attacks by Iran and its allies are expected in the Middle East.
White House National Security spokesman John Kirby said on Monday that the United States is prepared for a significant attack from Iran or groups it supports, even this week.
US Ambassador to Ankara Jeff Flake said the US wants Turkey and other allies that have relations with Iran to persuade Iran to reduce tensions in the Middle East.
Oil prices fell in early trading today after rising more than 3 percent yesterday as investors monitored conflict in the Middle East that fears could tighten global crude supplies.
INTERNAL AGENDA
Today's domestic agenda includes June balance of payments data and July housing sales statistics. The Treasury will reissue four-year TLREF indexed and fixed coupon bonds and directly sell two-year lease certificates today.
Vice President Cevdet Yılmaz will chair the Investment Environment Improvement Coordination Board meeting today. The meeting agenda includes the YOİKK 2024 action plan, developments and evaluations based on actions.
The meeting will also include information on Turkey's 2024-2028 international direct investment strategy and investment advisory council meeting, as well as consultations on the New Medium-Term Program covering the years 2025-2027.
GLOBAL MARKETS
Investors in global markets will be watching a raft of economic data this week from the U.S. that could provide clues about the Fed's next steps. Markets are evenly split on whether the Fed will cut interest rates by 25 or 50 basis points in September.
When producer price data is released in the US today, markets may be excited as the data could affect the Fed's preferred inflation indicator, the personal consumption expenditures index (PCE).
In the US, the July personal consumption expenditures index will be released tomorrow, and retail sales data will be released on Thursday.
EXCESS LIQUIDITY RE-ESTABLISHED, OVERNIGHT INTEREST RATE DECREASED
Overnight interest rates and excess liquidity in the domestic market continue to be closely monitored. After excess liquidity reached approximately 400 billion TL, it disappeared last week and as of Friday, the liquidity deficit of the banking system exceeded 50 billion TL.
Data showed that liquidity surplus was re-established with approximately 20 billion TL as of yesterday. The overnight interest rate fell by 1 point yesterday to 51.37 percent.