Page 7 - TURKRptMay21

2.0 Politics 2.1 Watchlist
● Global liquidity: The tensions between the Fed and the markets have not dissipated, but a sell-off in US Treasuries, which brought a sell-off in EM currencies, took a break.
The Fed’s balance sheet is still growing.
One might say that a note from the Turkish service of Reuters on April 16 betrays how global financial markets do not work on news or data flows but according to the sirenic urgings of the dominant players: “Even higher-than-expected retail sales and employment data in the US could not prevent the fall in US Treasury yields.”
Expectations that shakier times lie ahead. The Gods of Money will decide the timing of the next sell-off. Mere mortals might expect “Sell in May, go on holiday” and the traditional liquidity dry-up in August as signposting the next shocks.
US President Joe Biden has announced another stimulus package and talk of tax hikes ahead is growing. The initial reaction came with a stress on stocks.
● Virus lockdowns and demand conditions in Europe
● Halkbank case: On April 12, a hearing held at the 2nd US Circuit Court of Appeals in Manhattan, a higher court that will decide whether Halkbank can be prosecuted by the US. The appeals court did not say when it will rule. The case stays politicised.
● April 24: Biden did a surprise with calling the WWI Armenian Genocide as “genocide”.
However, the move was tricky, and it does not mean that he burnt bridges with Erdogan. (The Biden administration appears to be employing this kind of two sided moves. Biden announced sanctions on Russian government papers-as it was reflected on media, but the US finance industry heavily bought Russian papers since the sanctions were just on primary market and the secondary market was open to benefit from the hit in prices caused by sanctions talks.)
7 TURKEY Country Report May 2021 www.intellinews.com