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Turkey’s dollar bonds rallied by 1.0-1.5 points across the curve following two headlines that seem to have caught the market’s attention. First, the nation’s official statistics office TurkStat noted that Turkey could post its first negative MoM inflation print in over four years in May. This comes after Erdogan fulfilled an election pledge to give free natural gas to households for the month. TurkStat expects “strong” downward impact on the CPI basket and that it would likely extend into next year, as the state will give households 25 cubic meters per month for free. Second, analysts note that Erdogan is expected to announce his cabinet by the end of this week wherein there is hope that Mehmet Simsek (former Deputy Prime Minister and Finance Minister) may be appointed. This comes after Erdogan met with Simsek on Monday, as per sources.
Turkey’s 6.5% 2033s were up 1.6 points to 80.12, yielding 9.58%.