Late Sunday evening we explained how Turkish autocrat and genocidal goblin, Recep Tayyip Erdogan, has engineered a diplomatic crisis with the U.S. by effectively taking hostages and demanding the extradition of arch nemesis Fethullah Gulen in exchange for their release.
Washington has been putting up with this for quite a while, but last week’s arrest of a U.S. Consulate employee on charges of being somehow linked to Gulen was apparently a bridge too far and so, the U.S. suspended visa processing in Turkey. Turkey did the same and at the first opportunity, the lira plunged the most since the coup.
Well, that spilled over into Turkish equities which had their biggest one-day drop since July 18, 2016. As Bloomberg notes, the chart shows the Borsa Istanbul index breaking below 100-DMA. It’s now down ~10% since peak in late August.
Meanwhile, 10-year yields climbed 29bps, the biggest gain since March 3, to 11.38% at one point.
“If this fight with U.S. continues, country risk won’t decline whatever your policies in other areas are,” Ozlem Derici, founder of Spinn Consulting in Istanbul, told Bloomberg by phone.
Oh, and in case you needed another reason to be nervous about this, Erdogan has started reconnaissance activity in Idlib “to establish observation points.” Mmmm, hmmm.