Turkish problems hurt European banks
Expected weak growth of the Russian stock indexes at the opening of trading on the background of the attempts of the nearest futures on “MSCI emerging markets” to stabilize after the failure of the 4.5% to 1039 points on the eve of the Turkish problem. The confrontation between Turkey and the United States, in which the Americans refuse to lift sanctions against Turkey until will not be released until an American citizen, who was arrested the authorities.
Turkish assets fell significantly over the past 3 days. For example, the Turkish sovereign Eurobonds, nominated in us dollars with a duration of less than one year rose in yield at 380 b.p. to 9.3%, while shares of several major banks has fallen by more than 20% ,which ricocheted and struck a number of European banks, bonds which have grown in profitability.
Because they have on their balance sheets Turkish obligations. In turn, the Russian market is fundamentally is more likely to rise to 22 August. Ruble supports the payment of insurance premiums on August 15, but at the end of the week we expect the weakening of the ruble. Since the payment of the major taxes will be held on 27 and 28 August, and to impose sanctions on August 22.