High-frequency data show that the surge in net inflows to EM bond and equity markets seen last month is now easing, but inflows remain strong. We think that will remain the case as global risk appetite continues to improve. The data provide signs that the Turkish central bank’s recent policy shift is winning over investors. While comments today from President Erdogan threaten to undermine this, the data so far support our non-consensus view that the lira will strengthen against the dollar by the end of this year.
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