Turkey’s Borsa Istanbul Introduces Circuit-breaker System Amid Sell-off


US stocks closed mostly higher on Friday as the failure by Congress to agree on a stimulus package before its recess was offset by outperformance in jobs with 1.76 million jobs added in July. The DOW and the S&P manged to just eke out gains at 0.17% and 0.06% respectively while the NASDAQ closed 0.87% lower, albeit 2.5% higher for the week. Yield on 10Y USTs closed higher at 0.5640%.


A third of British businesses are planning on job cuts in Q3 as the government winds down its furlough scheme according to a CIPD survey. The survey comes amid calls for the government to extend the job retention scheme beyond October. The pound closed weaker at $1.3052 while yield on 10Y UKTs was higher at 0.139%.


German industrial production beat expectations in June, rising 8.9% month-on-month against a forecast of 8.1%. Coupled with increasing export figures – up 14.9% in June – the gradual economic recovery seems to be on track for Europe’s largest economy. The euro closed weaker at $1.1787 while yield on 10Y DBRs was higher at -0.509%.


Asian stocks were largely higher on Monday despite the next round of stimulus failing to proceed in the US Congress on Friday. With the NIKKEI closed for a Japanese holiday, the ASX led gains, up 1.76%, while the CSI was up 0.75%. The HANG SENG closed lower however at -0.63%.


Turkey introduced a circuit breaker system on the Borsa Istanbul linked to the Borsa 100 index to stifle panic selling; the breakers will be triggered if the index falls to 5% in the first threshold and 7% in the next. The introduction follows a tumultuous week that saw the lira shed 4.4% against the dollar while the Borsa 100 drop 5.9%. TURKEY 11 ⅞ 30s were higher, trading in the mid 127s.


Fitch maintained its rating on Russia’s long-term foreign currency debt at BBB with a stable outlook on Friday. The ratings agency affirmed the rating despite forecasting a 5.2% GDP contraction in 2020. Fitch’s base scenario however expects recovery of 3.6% in 2021 and 2.5% in 2022. The ruble closed weaker at 73.7230 to the dollar while RUSSIA 30s were down, trading in the low 115s.


Moody’s downgraded the outlook on Ethiopia and Senegal’s long-term foreign currency bonds on Friday to negative in the aftermath of the coronavirus shock; both countries had the outlook maintained at B2 and Ba3, respectively. IVYCST was little changed on Friday in the aftermath of President Ouattara’s decision to accept his party’s nomination to stand as the candidate in the October elections, potentially running for a third term in alleged violation of the country’s constitution. The ruling party had nominated then Prime Minister Amadou Coulibaly before his demise in July.