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WorldMarketsReactToTurkey’s 425bps RateHike
Judging by the reactionfromSocGen and JPY crosses (and thus global equity markets), the Turkish Central Bank’s decision – totightenakaubertaper– has solved all the tapering, tantruming, turmoiling problems in markets. TRY obviously dumped on the news (now at 2.18 -2100 from highs). JPYcrossesinstantlyexplodedhigher, automaticallyliftingUS (Dow +60) andJapanese (NKY +110) stockfuturesmarketsbeforetheyclosed. Gold fell very modestly ($1). JPY continued to weaken and when markets re-opened, gold dropped further (-$6 at $1250); Dow is now +110 from pre-Turkey, NKY +175pts; S&P futures are up 10points onthenews as stops are runto 1800 but the EEM ETF rallied around 1% (only).
TRY is ripping.. these are 2-week lows (or highs for the Lira against the USD)
EEM rallied then faded to a ~1% gain…
JPY was ramped and stocks followed…
Bear in mind that the 1,800 stop witch hunt perfectly tags the closing VWAP from Friday’s dump-day – the big question is do we get follow-through…
But the Nikkei can’t get enough…
Gold fell modestly on the news… and more when markets reopnened…
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