ISTANBUL: The Turkish lira was firmer and bonds were flat on Tuesday ahead of a debt auction, while data showed consumer confidence fell to its lowest in 25 months in September, strengthening expectations of monetary policy easing.
By 0727 GMT the lira stood at 1.8083 against the dollar , slightly stronger than 1.8114 late on Monday. Against its euro-dollar basket it eased to 2.0793 from 2.0774.
The yield on Turkey's two-year benchmark bond was steady at 7.55 percent.
"There isn't any major data that would affect the bond market before the central bank's policy meeting. On the local front, investors will eye the treasury tap of the benchmark bond," said Burak Maldar, treasury manager at Halk Invest.
The central bank will holds its monthly policy meeting on Oct. 18. At its last meeting in September, the bank cut its overnight lending rate by 150 basis points to 10 percent and hinted it could do more to support the slowing economy.
"We expect the benchmark yield to trade between 7.50-7.68 percent in
intraday trade," Maldar said.
On Tuesday, the treasury will tap its two-year benchmark bond maturing on Sept. 24, 2014, the only auction in October.
Late in September, the treasury had projected a domestic debt redemption of 3.9 billion lira ($2.16 billion) and a domestic debt borrowing of 3 billion lira in October.
Data from the Turkish Statistics Institute on Tuesday showed Turkey's consumer confidence index fell 2.5 percent to 88.8 points in September from a month earlier, its lowest level since August 2010.
"We still think that consumer confidence points to very limited consumption growth, since in 2009 global financial crisis consumer confidence index in Turkey was below 70," wrote Ozgur Altug, chief economist at BGC Partners.
"We expect further deterioration in consumer confidence in October due to the Syria conflict. This data, along with many other macro data, also paves the way for a limited upper end cut by the central bank," Altug added.
Turkey's main share index was up 0.91 percent at 70,337 points, outperforming a 0.55 percent rise in the emerging markets index.
"Thanks to US retail sales, global markets are in the green. Turkish equities are likely to join the mini rally today. It will be a trial for the index to break the 70,000 resistance level. If it is broken, the next target will be 71,700," wrote analysts at Ata Invest.
Comments
Comments are closed for this article.