Sign up to create alerts for Instruments,
Economic Events and content by followed authors
Free Sign Up Already have an account? Sign In
Quotes
All Instrument Types
- All Instrument Types
- Indices
- Equities
- ETFs
- Funds
- Commodities
- Currencies
- Crypto
- Bonds
- Certificates
Please try another search
👀 Bezos, Buffett & Berkowitz: What's in Their Portfolios? Unlock Data
Traders Brush Off Turkey Sanctions, But Warn Worse Could Come
Published Oct 15, 2019 04:53AM ET
Updated Oct 15, 2019 05:25AM ET
© 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.
Related Articles
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
Add a Comment
We encourage you to use comments to engage with other 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, don’t trash it.
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. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.