Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Traders Brush Off Turkey Sanctions, But Warn Worse Could Come

Stock MarketsOct 15, 2019 05:25AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Traders Brush Off Turkey Sanctions, But Warn Worse Could Come

(Bloomberg) -- Investors in Turkish markets brushed off Monday night’s U.S. sanctions, though some warned that harsher penalties could still come.

The lira strengthened as much as 1% before paring gains to 0.2%, trading at 5.9142 per dollar as of 11:48 a.m. in Istanbul. Turkey’s main BIST 30 climbed 1.5%. Those moves only partially eroded losses that have made Turkish assets among the worst performers in emerging markets this month.

Since President Donald Trump warned on Oct. 7 that he could “obliterate” Turkey’s economy if Ankara did anything he considered “off limits” with its incursion into Syria, traders have braced for sanctions that would deal a severe blow to the Turkish financial system.

“It’s a short-term relief,” said Piotr Matys, a strategist at Rabobank in London. “The risk that far more consequential and punitive measures could be used by the U.S. prevails as the military operation in northern Syria continues.”

For now, Washington is sanctioning three senior Turkish officials and increasing steel tariffs. The penalties may have little impact on the wider economy and are in line with measures adopted last year, which were subsequently removed as relations between the NATO allies improved.

Much depends on how Turkish President Recep Tayyip Erdogan responds. On Monday, he said the offensive in Syria would continue no matter what.

“I fear that Erdogan will not be able to help himself, and we will see retaliation,” said Timothy Ash, a strategist at BlueBay Asset Management in London. “If they decide to respond, tit for tat, it could get ugly with a game of escalation between the two sides.”

The sell-off this month has created opportunities for investors brave enough to jump in. Real yields on Turkish local-currency government bonds have climbed to the highest level in a year. The Borsa Istanbul 100 Index of equities fell more than 5% on Monday and touched it’s lowest level since June.

Traders Brush Off Turkey Sanctions, But Warn Worse Could Come
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email