Thoughts on Turkish Lira and broader EM contagion risks
Watching the $TRY today, seeing it hover around 18.6264 has me thinking about potential spillover effects. While the immediate focus for most here is usually on the DAX or FTSE, it's hard to ignore the currency moves in larger emerging markets, especially with ongoing inflation concerns globally. I'm keeping an eye on how this might subtly influence sentiment towards European banks with EM exposure.
It's not about directly trading the lira for me, but more about understanding the broader risk appetite. If we see sustained weakness or increased volatility in currencies like $TRY, it could easily ripple into how funds view general risk, impacting flows into even our more stable European equities. Definitely on my radar as a macro undercurrent.
That's a really interesting point about the potential impact on European banks. Do you think the direct exposure is large enough to cause significant ripples, or is it more about the general sentiment shift?