ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
The verdict is almost in: the Turkish lira is overcoming its headwinds. After the results of Turkey’s constitutional referendum in mid-April, the Turkish lira bounced around in indecision. Against the U.S. dollar, the indecision ended in conjunction with the April 28th release on monetary policy from the Central Bank of the Republic of Turkey (CBRT). … Read more
By a slim margin, the Turkish people voted to change the country’s government from a Parliamentary system to a Presidential one. The change will reportedly cement the power of President Recep Tayyip Erdogan and allow him to stay in power for as long as 2029 assuming he wins the next two Presidential races. Erdogan argued … Read more
AT40 = 46.9% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 62.0% of stocks are trading above their respective 200DMAs VIX = 12.9 (volatility index) Short-term Trading Call: cautiously bullish (notable caveats explained below) Commentary The timetable for a May end to this period of extremely low volatility looks like … Read more
When I last wrote about the Turkish lira in mid-January, USD/TRY had pulled back sharply off a parabolic run-up. The iShares MSCI Turkey (TUR) was also at the beginning of a dramatic bottoming pattern that was later confirmed with a close above its 50-day moving average (DMA). Source: FreeStockCharts.com When the Central Bank of the … Read more
Desperate times bring out the creativity. On Thursday, January 12, the Central Bank of the Republic of Turkey (CBRT) effectively tightened monetary policy by canceling its weekly auction used to fund banks. On top of this move, Turkey’s President, Recep Tayyip Erdogan, likened Turkey’s forex predicament to a fight against economic terrorism. Deutsche Bank (DB) … Read more
“The Central Bank of the Republic of Turkey (CBRT) closely monitors the excessive volatility in the markets and will take necessary measures against unhealthy price formations that are inconsistent with economic fundamentals. Banks’ borrowing limits at the Interbank Money Market established within the CBRT have been lowered to TL 22 billion to be effective as … Read more
“The slowdown in aggregate demand contributes to the fall in inflation. Yet, exchange rate movements due to recently heightened global uncertainty and volatility pose upside risks on the inflation outlook. The Committee decided to implement monetary tightening to contain adverse impact of these developments on expectations and the pricing behavior.” – The Central Bank of … Read more
The trade on the blow-off top on USD/TRY, the U.S. dollar versus the Turkish lira, turned out to be short-lived. Now, the lira looks poised for a lot more weakness. USD/TRY never cracked the low of the day from the blow-off top, and now it is starting into a new uptrend. Source: FreeStockCharts.com Last week, … Read more
Did the misery for the Turkish lira (USD/TRY) just reach a climactic end? The Turkish lira quickly lost favor in the wake of more political turmoil in Turkey. Most of the losses actually occurred right before midnight (Eastern U.S. time) and within minutes. This delayed but sharp reaction made the move look highly suspect. The … Read more
(This is an excerpt from an article I originally published on Seeking Alpha on July 31, 2015. Click here to read the entire piece.) A month ago, I pointed out how the Turkish lira had reversed all its post-election losses. I argued that the lira was due to resume its weakness as the Central Bank … Read more