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“Turkish lira is back as king of volatility. All that was ‘great’ over past 2 trading weeks is gone today. Headline risk remains an issue for Turkey, but if you need volatility, TRY and TUR [iShares MSCI Turkey Exchange Traded Fund/ETF] are great,” The Market Ear wrote on November 23.
“The great ‘derivative’ of Turkey is Spanish bank BBVA [see graph above]. Sure, BBVA is selling the US business, but that is now priced in. We are seeing some early reversals in Europe today, especially in the most squeezed indexes such as IBEX. BBVA vs TRY inverted [chart above] have widened a bit lately. If Europe finds some resistance here, BBVA could be looking to close some of the gap relative to the TRY,” it added.
“Feels very 2018 [which brought the August lira crisis]. The CBRT [central bank] moved and hiked rates last week, and by 475bps which was good, but the messaging from locals is that was not really enough... In 2018 they had to aisle rates to 24% in the end, versus 15% now to draw a final line in the sand,” Timothy Ash of Bluebay Asset Management wrote on November 24 in a note to investors.
2.4 Erdogan’s readying for “charm offensive” and will “become whatever Biden wants him to be”
The Democrats proved the putridness of the US establishment by managing to nominate a dead-loss candidate but a Chinese peasant in Wuhan ate a bat or pangolin and, as a result, the destruction of the prevailing “global” system looks set to reach its end as the Kremlin’s hackers could not conspire to bring about a surprise as they did to get Trump in in 2016. But don’t go expecting deliverance, economic, environmental or otherwise.
Biden’s term would start in January. His victory is already being seen in the ongoing turmoil in Turkey.
Biden is expected to flick the switch on at least five CAATSA sanction items in response to Erdogan’s S-400 missiles, while there’d be no more crude interference with New York prosecutors’ efforts to bust Turkey’s-controlled Halkbank for allegedly breaching US sanctions on Iran.
Shock waves. Biden would no doubt like to see Erdogan dumped on his ass, but he might practically work with him if Turkey’s top man manages to stay topman despite all the shock waves.
15 TURKEY Country Report December 2020 www.intellinews.com
