Turkish Lira
The Turkish Lira sell-off has been unusually neat and tidy so far, but with the short end of the rates curve flush with offers, it suggests markets are in the early stages of pricing in a more aggressive CBRT rate cut cycle. So, we could be in for a period of protracted weakness on the Turkish lira.
EUR/USD
G-10 traders have shifted into USD buy on dip mode in the wake US employment data on Friday. Given the recent ECB developments and the convincing break below 1.1250 last Friday, the EUR/USD sees the lion's share of the flow so far. Short EUR positioning has been reduced significantly on last week’s break above the 200 DMA, suggesting the short to long ratios are much cleaner now. And with the Fed rate curve repricing now sending Bund-UST spreads back to May levels, traders could use pullbacks to 1.1240 to re-engage short EUR position over the near term.
Gold Resilience Strikes
The shift in investor psyche which has been striking as gold has been able to maintain gains in the face of strong US equity markets and continues to benefit from a shift in policy from the Fed and other central banks.
However, we do think there is some gas in the US economic tank supported by the strong payroll report, which could reduce the pace of gold rise in 2019. But since the central-bank put only gets the economy so far before we will need to consider longer-term trends such as recession, so look for strategic buying to remain dependable on any extended dips