Turkey turmoil sends ripples across world stock markets, euro falls

Chris_the_Brit

Grand Master of the Friendzone
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23,667
#1
LONDON (Reuters) - A plunge in the Turkish lira rocked global equities and emerging markets on Friday and fears of more turmoil sent investors scurrying for safety in assets like the yen and U.S. government bonds.

The lira fell as much as 14 percent against the dollar, chalking up its worst day since Turkey’s financial crisis of 2001. It came on the back of a deepening rift with the United States, worries about its own economy and lack of action from policymakers.

The currency is now down more than 36 percent this year, and 17 percent this month alone, fanning worries about a full-blown economic crisis.

Lira one-week implied volatility spiked to a record high of over 49 while the one- and three-month equivalents both surged to their highest since late 2008.

Bank shares across the continent fell and the euro slipped to its lowest since July 2017 as the Financial Times quoted sources as saying the European Central Bank was concerned about European lenders’ exposure to Turkey.

“You have a number of Spanish banks which effectively have very large stakes in banks operating in Turkey. If Turkey is going through economic and political turmoil - which it is - we could see non-performing loans increase there,” said David Madden, markets analyst at CMC Markets in London.

“Many of these European banks have their own non-performing loans and liquidity issues to deal with themselves. Now all of a sudden a currency crisis in Turkey could trigger another dimension to their own financial problems.”

Shares in France’s BNP Paribas, Italy’s UniCredit and Spain’s BBVA, the banks seen as most exposed to Turkey, fell over 4 percent.

That took euro zone bank shares down 3 percent while the pan-European STOXX 600 index fell 1 percent.
https://www.reuters.com/article/us-...s-as-turkey-turmoil-ripples-out-idUSKBN1KV03F
 

Hamster

Resident Rodent
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28,787
#2
What the world should do is boycott the USA pending the results of their next general election.
 

Solarion

Honorary Master
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Nov 14, 2012
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16,437
#10
What the world should do is boycott the USA pending the results of their next general election.
That all depends on how you like your freedom delivered to you; via forum and media sock puppets winding up your population with ultra dirty information on your government and shattering your investor confidence or via the barrel of an Apache Gunship.
 

Solarion

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#11
After nearly two years in a Turkish prison, hopes for the release of American pastor Andrew Brunson have been deferred. A Turkish court ordered 50-year-old pastor to remain behind bars until at least his next hearing on October 12.

A Case study in the absurdity of the present Turkish justice system,” tweeted the author of several books about freedom in Turkey. “Brunson is charged with being part of a conspiracy of evangelicals, Mormons, & Jehovah's Witnesses embedded among American service personnel in Turkey who conspired to divide the Turkish state on behalf of the PKK and Gulen movement. It would be a farce if it weren't so serious.”

“Keeping him in prison is a political decision,” he continued. “… Letting him out would have been a simple, cost-free way for the Turkish government to show it was concerned about the relationship with the United States. Holding him for at least 3 more months is a new low.”

Held without charges and without bail for months, Brunson was eventually accused of abetting the Gülen movement—under the leadership of Fethullah Gülen, a Turkish Islamic scholar and cleric in exile in the United States. Erdoğan has long opposed Gülen and blamed his followers for the overthrow attempt.
Full Article
 

Solarion

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#12
Turkey vows retaliation for US sanctions over pastor drama

Turkey was on Thursday drawing up retaliatory measures after Washington slapped sanctions on two Turkish ministers in the one of the biggest crises between the two North American Treat Organisation allies in recent years.

Tensions have soared over Turkey's detention on terror charges of American pastor Andrew Brunson, who was first held in October 2016 and was moved to house arrest last week.

The sanctions targeting Justice Minister Abdulhamit Gul and Interior Minister Suleyman Soylu freeze any property or assets on US soil held by the two ministers, and bar US citizens from doing business with them.

White House spokeswoman Sarah Sanders told journalists both ministers had "played leading roles in the arrest and detention of Pastor Brunson", who led a Protestant church in the Aegean city of Izmir.

The US Treasury implemented the sanctions under the 2016 Global Magnitsky Act named after Russian lawyer Sergei Magnitsky, who died in a Moscow jail, and which allows the US to sanction foreign officials implicated in rights abuses.

The Turkish foreign ministry warned that the move "will greatly damage constructive efforts" to solve outstanding issues and told Washington it would retaliate.

"Without delay, there will be a response to this aggressive attitude that will not serve any purpose," it said.
Article
 

Solarion

Honorary Master
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#13
Will Turkey's economic woes reach Europe?

Turkey's embattled lira on Friday hit new record lows against the US dollar, losing some 5 percent in value. The lira went into free fall, sinking more than 12 percent at one point to reach an all-time low.

It has now lost more than a third of its value this year against the US dollar and the euro.

The plunge comes amid growing fears over the exposure of European banks. Tensions with the United States also show no sign of easing, as Washington piles more pressure on Ankara with sanctions after a meeting between a Turkish delegation and US officials in Washington yielded no apparent solution to a spat over the detention in Turkey of an evangelical American pastor.

More broadly, concerns over the sickly Turkish economy's wider impact were intensified Friday by a report in the Financial Times that the supervisory wing of the European Central Bank had begun to look more closely at eurozone lenders' exposure to the country.
Full Article
 
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noxibox

Honorary Master
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16,413
#14
Seems Trump is great for the US economy;
Shows how deceiving a single number can be. Unemployment was on a downward trend anyway. GDP on an upward trend. GDP growth rate has been up and down over the years, and the current number is within the range, so nothing unusual. Looks like the deficit was coming down, but is now increasing again. Thus no, Trump does not seem to be great for the US economy.
 

rietrot

Executive Member
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Aug 26, 2016
Messages
8,156
#17
This is a interesting take on things. That suggests Turkey is being punished for dumping US bonds.

Last month,*when we reported*that Russia had liquidated the bulk of its US Treasury holdings in just two months, we said that "we can't help but wonder - as the Yuan-denominated oil futures were launched, trade wars were threatened, and as more sanctions were unleashed on Russia - if this wasn't a dress-rehearsal, carefully coordinated with Beijing to field test what would happen if/when China also starts to liquidate its own Treasury holdings."

As it turns out, Russia did lead the way, but not for China. Instead, another recent US foreign nemesis, Turkey, was set to follow in Putin's footsteps of "diversifying away from the dollar", and in the June Treasury International Capital, Turkey completely dropped off the list of major holders of US Treasurys, which has a $30 billion floor to be classified as a "major holder."

According to the US Treasury,*Turkey's holdings of bonds, bills and notes tumbled by 52% since the end of 2017, dropping to $28.8 billion in June from $32.6 billion in May and $61.2 billion at the recent high of November of 2016.
https://www.zerohedge.com/news/2018-08-15/turkey-joins-russia-liquidating-us-treasurys

I still don't really get what the issue between the US and Turkey actually is.
 
Joined
Feb 1, 2008
Messages
11,672
#20
I still don't really get what the issue between the US and Turkey actually is.
I'm betting they got in bed with NATO with the sole purpose of expanding their empire, northern Syria and the Kurds being the chunk of land they want first it seems.

It all went to shyte after that: as we know, the US supports the Kurds and Russia holds most of the cards these days in Syria so Turkey pivoted that way and here we are ...
 
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