​Heads up: Violent Kobane protests could shake markets

TURKEY - In Brief 07 Oct 2014 by Atilla Yesilada

---

I had originally intended to update our audience with a long Market Brief on Turkey’s three conditions to deploy ground troops against ISIS. The violent protests in defense of Syrian Kurdish town Kobane that erupted across the nation last night completely changed the agenda. Turkey is waking up to a very bad day, amidst a pronounced sell-off in Wall Street and Asia. Despite a lower than expected headline CPI print and Fitch’s decision to preserve Turkey’s credit rating and outlook (stable), investors could focus on political risk and ditch TL denominated assets. As the fog clears on Kobane and the government’s policy to keep the streets calm, I’ll update again. Let’s start with the smaller headlines: · Greek Cypriote Administration pulled out of intercommunal peace talks, claiming Turkey’s aggressive naval posture in waters surrounding the island rendered them futile. · Preliminary reports suggest that EU Commission’s Candidate Progress Report to be released today will be more critical than ever, pointing out gross meddling with the judiciary, as well as other human rights deficiencies. · According to Turkish press, in retaliation for the passage of the war powers act before Id of Sacrifice (or Haj), ISIS is planning terror attacks in Turkey. All 81 provincial governors are sent notices to put the security forces on high alert. The Id was not restful for Turkish politicians, as they scrambled to translate the war powers act into a concrete game plan. Talking to CNN International PM Davutoglu pronounced Turkey's three conditions to deploy “boots on the ground” against ISIS, and in Syria only: · U.S. must acknowledge that the operation will also target the Assad regime. ...