World Markets React To Turkey's 425bps Rate Hike

Judging by the reaction from SocGen and JPY crosses (and thus global equity markets), the Turkish Central Bank’s decision – to tighten aka ubertaper – has solved all the tapering, tantruming, turmoiling problems in markets. TRY obviously dumped on the news (now at 2.18 -2100 from highs). JPY crosses instantly exploded higher, automatically lifting US (Dow +60) and Japanese (NKY +110) stock futures markets before they closed. 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 on the news as stops are run to 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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