• Erdogan wins presidential elections, no need for the second round

  • Declines across major European stock indices

  • Trade conflict still in the spotlight

The general elections in Turkey did not spur any bigger movement across markets. The lira held stable in the morning and is now trading lower against both USD and EUR. Across major European stock markets we are observing broad declines. It is worth to note that the Polish stock market resists this downward pressure and is outperforming its peers from the Old Continent. Japanese yen is the strongest currency in the G10 basket while the Canadian dollar is the top underperformer. On the commodity front we are observing sell-off as investors turn to safier assets.

Every week the US Commodity Futures Trading Commission provides us with an update of positioning changes across currencies, commodities and other financial instruments. While the prior releases did bring no huge shifts, the latest one did so sending first signals that the recent US dollar surge may come to an end relatively soon.

Developed markets in Europe might feel the pain from German political woes surrounding Angela Merkel’s standing. Notice that an informal EU summit on immigration held over the weekend did not produce any constructive results being favourable for German Chancellor albeit she said the meeting produced “a lot of goodwill” to resolve differences over migration issues.

The last two months have been far from good for the cryptocurrency market. The capitalization of the whole market shrinked by over $200 billion since the beginning of May to sit just a notch above the $250 billion at press time. Moreover, the Bloomberg Galaxy Crypto Index has exceed its drop to the 41% since its inception on May 3.

Uncertainty was a sky-high on Friday as options market implied a possible 3% move in the Turkish lira in either direction after the weekend’s opening but it proved to be much calmer than that. At the end of the day it turned out that there were no surprises: Erdogan won the crucial presidential elections.

We encourage you to take a look at our weekly economic calendar review available here.