TRY crashes to new lows; Stocks also decline

         Summary:

• TRY plunges more than 20% as currency crisis escalates

• Risk-off flows seen across the board with stocks lower; Gold and JPY bid

• Mixed data from the US and Canada

• UK growth illustrates weak foundation

• Crypto markets drop but Dash jumps higher

The swoon lower in the Turkish Lira this morning has served of a harbinger of what was to come with the quick 12% decline around 7AM dwarfed by a larger drop this afternoon. The latest flush has come after US president Trump took to twitter to announce the doubling of sanctions against the country as tensions between Washington and Istanbul go from bad to worse.

Given the scale of the moves we’ve seen in the TRY, it is not surprising that we’re getting clear risk-off flows with the USD and JPY obvious beneficiaries. Stocks have also experienced some selling with the DE30 falling to its lowest level of the week around 12400. As far as the US is concerned, there’s also been declines although its is still holding up fairly well by the European close.

The main economic releases of the day , and from a North American point of view at least of the week, have delivered mixed results with conflicting messages seen in both the US inflation figures and the Canadian jobs report. As is such the initial market reaction is a little unclear with the USD remaining well bid after earlier rising on potential safe haven flows due to the situation in Turkey while the Canadian dollar has fallen back after attempting to rally.

The most recent growth figures for the UK came in below expected this morning with a M/M increase of a paltry 0.1% below both the expected 0.2% and the prior 0.3%. Despite raising rates earlier this month the pace of growth in the UK remains fairly slow and given the new tighter monetary conditions and the looming threat of a no-deal Brexit, there is plenty to suggest a pause for thought for sterling bulls, even if the currency has depreciated significantly of late.

Friday seems to be a continuation of yesterday’s calmness. Over the past 24 hours major cryptocurrencies were settling down and today they continue pushing lower. The capitalization of all cryptocurrencies stands subtly above $225 billion whereas the capitalization of altcoins sits a notch above $115 billion. Today’s major topics concern blockchain-powered bonds, Chilean merchants and a possible application of  the Google Search engine into cryptocurrency investing. 4 out of the 5 crypto markets are all lower today with declines of a few percent, but Dash is the standout best performer and higher by 7% on the day. Dash has surged higher after doubling down on its core value proposition as a payments currency - something which is surprisingly overlooked by most cryptocurrencies