Turkey’s Tayyip Erdogan has won his gamble that snap elections would shore up his position as voters backed his AK Party as the best bet for stability. Markets have responded by pushing the lira and the stock market higher, but for Turkey’s Western neighbours his victory is a double-edged sword: they would naturally welcome Erdogan now using his enhanced position to do more on the Syrian conflict and migrant conflict, but it would only add to tensions with Europe if he were to point to the result as justification for an increasingly authoritarian path. His party is just shy of the super-majority needed to put a new constitution granting him extra powers to a referendum, but his PM has already called on other parties to back such a move.
After sailing relatively smoothly through the choppy waters of the financial crisis and its after-effects, the Canadian economy is finally getting caught up in the global economic slowdown.
It’s probably a good thing the Federal Reserve concluded its latest policy meeting with a strong signal of its intentions, because GDP growth data expected later on Thursday are unlikely to cement rate hike views one way or another.
For all of the incessant talk from market trading desks on how economic forecasters are hopelessly off track on just about everything, their collective thinking on the subtleties of Fed policy near a potentially historic turning point has been well worth listening to.
Sweden’s Riksbank left its negative interest rate steady at -0.35 percent on Wednesday and increased its bond purchase programme by another 65 billion crowns (just under 7 billion euros). It also said it could cut rates again if needed.
For the European Central Bank, digging deeper into quantitative easing may be the only policy option left, now that growth in bank lending to businesses is stalling again.