Judging by the reaction from SocGen [6] and JPY crosses (and thus global equity markets), the Turkish Central Bank's decision - to tighten aka ubertaper - has solved all the tapering, tantruming, turmoiling problems in markets. TRY obviously dumped on the news (now at 2.18 -2100 from highs). JPY crosses instantly exploded higher, automatically lifting US (Dow +60) and Japanese (NKY +110) stock futures markets before they closed. Gold fell very modestly ($1). JPY continued to weaken and when markets re-opened, gold dropped further (-$6 at $1250); Dow is now +110 from pre-Turkey, NKY +175pts; S&P futures are up 10points on the news as stops are run to 1800 but the EEM ETF rallied around 1% (only).
TRY is ripping.. these are 2-week lows (or highs for the Lira against the USD)
[7]
EEM rallied then faded to a ~1% gain...
[8]
JPY was ramped and stocks followed...
Bear in mind that the 1,800 stop witch hunt perfectly tags the closing VWAP from Friday's dump-day - the big question is do we get follow-through...
[9]
But the Nikkei can't get enough...
[10]
Gold fell modestly on the news... and more when markets reopnened...
[11]