Yesterday, Recep Tayyip Erdogan named his government and appointed Berat Albayrak as Minister of Treasury and Finance which is no one other than his
son-in-law. The President has now concentrated the entire executive power including the possibility to promulgate his own decrees. The potential risk of pressure on the Central bank leads to a very strong devaluation of the currency, almost as strong as during the 2016 coup (-3.5%). Especially since one of Erdogan's campaign promises was to retake control of the Turkish currency.
The USD/TRY graph speaks for itself (Source: Bloomberg)
The pound is back to its four-month lows against the dollar, weakened by the tense situation within the British government. The resignation of David Davis and then Boris Johnson, the Foreign Secretary, further isolates Theresa May. The risk of a no-confidence vote now weighs on the Prime Minister's shoulder, who favors a Brexit that is too "soft" for some of her political peers.
In July, the ZEW index of investor sentiment fell again, to -24.7 against -16.1 last month. Despite the positive indicators in terms of industrial production and unemployment, the fears of a trade war, coupled with the recent political instability, have degraded investor confidence.
History of the Zew index fort the pas two years, down 45.1 points since the beginning of the year (Source: zew.de)
The cartel's President, Souhail al-Mazrouei, wanted to set the record straight after Donald Trump's remarks. OPEC is not responsible for raising the oil prices, he said but is only looking for a balance between supply and demand. "I feel that OPEC is doing its part", he said, referring to the small increase in oil production expected this month.