Well then, I’m glad I spent the time to go into detail on Tuesday about the possibility of early “elections” (scare quotes there for a reason) in Turkey.
If you missed that piece, you’re pretty much going to have to read it now, because these headlines hit on Wednesday morning:
- ERDOGAN CALLS FOR EARLY ELECTIONS IN TURKEY
- ERDOGAN SAYS ELECTION SHOULD BE HELD ON JUNE 24
The reaction in the lira, bonds, and Turkish equities is the opposite of what we saw on Tuesday when Bahceli and MHP called for polls to be moved up.
Here’s an annotated chart of the lira that shows you the knee-jerk weaker when news that Erdogan would be considering this first hit on Tuesday and what happened this morning when it was made “official”:
It’s the same dynamic in equities:
If I had to guess, what’s going on here is that because Bahceli had suggested August 26 for the date of the snap elections and Erdogan has now decided to hold them more than two months earlier, markets are pricing in less in the way of time for inflammatory rhetoric and attempts on the part of Erdogan to juice the economy further in spite of the flagging currency. In other words, if he’s going to do this, sooner is better, if for no other reason than the interim period is bound to be characterized by his signature bullshit balderdash.
But again, that’s just a guess.