TURKEY: Oppo Ldr: Erdogan 'Has Strayed From Democracy'

Mar-19 12:51

Reuters reports comments from main opposition centre-left Republican People's Party (CHP) leader Özgür Özel. Says, following the arrest of Istanbul mayor Ekrem Imamoglu, among hundreds of other politicians, journalists and businesspeople, that President Recep Tayyip Erdogan "has strayed from democracy." Claims that Erdogan and the gov't "are taking away people's rights to elect who they want."

  • A short time ago, Justice Minister Yilmaz Tunc delivered a statement claiming that "It is not right to make a prejudgment in favour or against without having any knowledge about the content of the investigation...The rule of law is essential, no one can be given privilege...The judiciary does not take instructions from anyone." Claims that Turkey "is a state governed by the rule of law". Says “the streets [are] not a place to defend justice” and that "Threatening members of the judiciary is also unacceptable. It is impertinent to associate the investigations and cases initiated by the judiciary with our President."
  • Amid much market turbulence, there has been little reaction from foreign gov'ts. Reuters reported comments from an unnamed German gov't official claiming that "the last 24 hours do not give the impression that Turkey wants to make the discussion of defence cooperation with Europe easier."
  • Given the critical strategic importance of Turkey for NATO concerning security in the Middle East (most notably in Syria), and its possible role as a mediator between Russia and Ukraine, in addition to its position in slowing the flow of migrants to the EU, it is unlikely that gov'ts in Europe will prove highly critical of the arrests. 

Historical bullets

ESM ISSUANCE: 10-year Feb-35 syndication: Priced

Feb-17 12:38
  • Reoffer: 99.063 to yield 2.859%
  • Size: E2bln WNG
  • Books closed in excess of E8.5bln (ex JLM interest)
  • Spread set earlier at MS+42bps (guidance was MS+45 area)
  • HR 98% vs 2.50% Feb-35 Bund (ref 100.16 + 37.8bps)
  • Maturity: 26 February 2035
  • Coupon: 2.75%, Long first
  • Settlement: 24 February, 2025 (T+5)
  • ISIN: EU000A1Z99W5
  • Bookrunners: BofA (DM/B&D), DB, Santander
  • Timing: TOE 12:22GMT / 13:22CET. FTT immediately.

From market source

JPY: Fading USD/JPY Adds to Bullish JPY Impetus

Feb-17 12:34

USD/JPY fade picking here slightly into (what would be) the US open - USD/JPY edges to a new pullback low at 151.42, marking a break through 151.65 and the overnight lows. Weakness here looks contained until any test or break through more notable support at 150.93 - the YTD low posted just over a week ago.

  • Perhaps unsurprisingly volumes are lighter than average so far Monday with the US holidays, however activity is holding up pretty well: CME JPY futures show activity running ~15% below what you'd expect to see at this point in the session.
  • As mentioned above, conviction over shorting EUR/JPY is building among the sell-side, and coincides with the failure of the cross to break technical resistance at the 50-day EMA in recent sessions - and should USD/JPY take out the bear trigger at 150.93, that makes two notable technical indicators pointing to JPY strength.

OPTIONS: Larger FX Option Pipeline

Feb-17 12:30
  • EUR/USD: Feb18 $1.0300(E1.7bln), $1.0440-50(E1.3bln); Feb19 $1.0500(E1.5bln); Feb20 $1.0520-25(E1.5bln)
  • USD/JPY: Feb19 Y155.00-20($1.7bln); Feb20 Y154.00($3.0bln)
  • NZD/USD: Feb19 $0.5450(N$1.7bln)
  • USD/CAD: Feb18 C$1.4295-00($1.5bln)
  • USD/CNY: Feb20 Cny7.2000($1.9bln), Cny7.2500($1.4bln), Cny7.3700($1.3bln)