The ongoing economic crisis in Turkey continues to weigh on markets, pushing US equity futures into negative territory while Treasuries continue the rally from last week. Even though Turkey may only make up a small portion of the global economy, there is fear amongst market participants that the situation could spread in a manner reminiscent of past crises in emerging markets. Turkey’s central bank was able to allay some fears by pledging to provide liquidity and reduce reserve requirements for its banks; but, ultimately the three separate speeches by President Erdogan in which he allegedly took higher rates and an international bailout off the table kept the flames of the risk-off sentiment lit.
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