Market Talk- October 9th, 2017

Generally a very quiet day in the markets, no real game changing events shocked the major markets today. German industrial production was announced with 2.6% MOM gain as opposed to a 0.7% forecast. ECB’s Lautenschlaeger did have a speech and hinted at scaling back asset repurchasing next year with the view to scrap the program altogether. This caused very little action to the EURUSD, with the rate holding around the 1.17 area.
The biggest shock of the day occurred in the Turkish markets, with 10 year bond yields increasing by +43bps today bringing yields up to 11.23%, this was due to the Turkish diplomatic row with the US. The two nato countries, suspended each other’s visas for their citizens. The Turkish lira subsequently lost 2.8% against the dollar – however since has regained some of its lost ground. The Turkish Borsa 100 temporally slipped below 100,000, it did manage to close above but still -2.73% for the day. When confidence is lost in an economy we see a ‘true bearish’ market where both the currency and the stock market decline.

This post was published at Armstrong Economics on Oct 9, 2017.