Hedge Tail Risks on Low FX Vol

Implied volatility across asset classes has receded in recent months as the barrage of global systemic risks (US-China trade war, disorderly Brexit and the manufacturing slowdown) has dissipated. Even though FX vol, along with other asset volatilities, remained...

Domestic Lira Demand a Sign of Turkish Rebound

Last month we warned that the signals from our EM crisis framework were painting a mixed picture of the Turkish economy, which suggests that investors should stay on the sidelines for now. There has been little improvement since then, with credit default swaps...

Setback to Turkish Recovery

Having appeared to have passed the worst of the economic crisis, Turkey has faced a fresh bout of turbulence in recent weeks. We have revisited our framework for identifying buying opportunities following an EM crisis to gauge Turkey’s position on the recovery path....

Turkey: A Recipe for Inflation

On a structural basis, Turkey has consistently been one of the most vulnerable economies to a currency crisis in light of considerable external vulnerabilities, and was flagged again in VP’s September thematic update of our debt and currency crisis framework. However,...