Sep E-mini stock futures this morning are down -8.50 points (-0.30%) at a 1-week low and European stocks are down -0.70% at a 1-1/4 month low. Concern about contagion of the Turkish economic crisis to the European banking system is hammering bank stocks and leading the overall market lower. The Turkish lira plunged to a record low of 7.2362 against the dollar and the yield on Turkeys 2-year government bond surged more than 90 bp to a 10-year high of 25.7%. The lira recovered from its worst levels but was still down more than 7% after Turkey’s central bank took steps to boost liquidity. The meltdown in Turkey spurred selling of EUR/USD and safe-haven demand for German bunds as EUR/USD dropped -0.32% to a 13-1/4 month low and the 10-year bund yield fell to a 5-week low of 0.306%. Asian markets settled lower as China’s Shanghai Composite closed down -0.34% and Japan’s Nikkei Stock Index closed down -1.98% at a 1-month low. USD/JPY fell -0.39% to a 1-1/2 month low, which undercut Japanese exporter companies and led losses on the Nikkei Stock Index. The dollar index is up +0.10% at a 13-1/2 month high. Sep 10-year T-notes are down -0.5 of a tick.
Turkey’s central bank raised the collateral forex deposit limits for Turkish lira transactions to 20 billion euros from 7.2 billion euros and banks’ current foreign exchange deposit limits of around $50 billion may be increased and utilization limits may be improved if deemed necessary.
Morning Markets Last Chg %chg
E-mini S&P 500 (U8) 2828.25 -8.50 -0.30%
Europe Euro Stoxx 50 3402.25 -24.03 -0.70%
Japan Nikkei Index 21857 -441 -1.98%
China Shanghai Comp. 2786 -9 -0.34%
10yr T-notes (CBT)(U8) 120.115 -0.005 -0.01%
U.S. Dollar Index 96.458 0.101 0.10%
Euro FX (EUR/USD) 1.1377 -0.0036 -0.32%
Dollar-yen (USD/JPY) 110.40 -0.43 -0.39%
Sterling (GBP/USD) 1.2751 -0.0007 -0.05%
WTI Crude Oil (U8) 67.29 -0.34 -0.50%
Brent Crude Oil (V8) 72.68 -0.13 -0.18%
Gasoline (Nymex) (U8) 2.0294 -0.0098 -0.48%
Gold (Comex) (Z8) 1208.4 -10.6 -0.87%
Silver (Comex) (U8) 15.180 -0.115 -0.75%
Copper (Comex) (U8) 2.724 -0.019 -0.67%