European markets remain under pressure today after the Turkish markets were hit by a wave of selling last week. The currency markets have pushed the Turkish Lira to record levels above 7 to the US Dollar as concerns about the economic policies of Pres Erdogan reached boiling point. This weakness has now begun to flow into the European financial sector as the ECB and markets are concerned about some European banks that have a large exposure to the Turkish economy.
Interestingly this weakness has now flowed into the Asian markets which were all lower today , European indices are all lower and the US stock indices were all lower on Friday and early indications are that markets will also open lower tonight.
Latest prices show the FTSE at 7622 down 42 , the DAX is at 12345 down 73 , the CAC is at 5402 down 12 and the MIB is at 20782 down 281.
In the FX markets the EUR is at 1.1377 down a further 33 today , the GBP is at 1.2752 down 17 , and the JPY is at 110.32 stronger by 61. Gold is sharply lower at 1196.75. Brent oil rallied on Friday night but is slightly lower today at 72.74.
Fears that Turkish corporates will struggle to repay USD debt will continue to affect the banking system in Europe . Sanctions placed by the US has combined with a faltering economy to cause the crisis.
The central bank has begun to revise the reserve requirements for the local banks in a move seen as a small start.
No major economic data is due out in Europe tonight.