The Daily Update - Turkey's Elation / Germany's Rejection

The President of Turkey, and leader of ruling Justice and Development Party (AKP), Recep Tayyip Erdogan has won the highly charged election that will allow him to govern for the next 5 years. The win will allow him to introduce sweeping new powers, which some, opposition included, are seen as a ‘blatant power grab’. Under the new system, the president is permitted wide-ranging executive authority, curtailing parliament's powers, as well as the office of prime minister being abolished. With 99 percent of the votes counted, Erdogan has 53 percent of the vote, with his closest rival, Republican People’s Party or CHP, trailing with 31 percent of the vote. With around 59mln people eligible to vote, it is claimed the participation rate was an astonishing 90%.

In the early hours of this morning, Erdogan addressed a crowd of supporters from AKP offices telling them ‘The winners of the June 24th elections are Turkey, the Turkish nation, sufferers of our region and all oppressed people in the world’ adding ‘Turkey has decided to take the side of growth, development, investment, enrichment and a reputable, honourable and influential country in all areas in the world’.

Markets have taken a ‘broad risk on’ in response to Erdogan's victory with Turkish Lira surging 3% vs the USD, the Borsa Istanbul 100, the country's benchmark stock index, jumping 3.7% and 10-Yr bond yields falling 42bps to 15.87% in the opening hours of trading.

Also over the weekend, we saw what some believe as the number one issue within the EU remains unsolved as European leaders failed to come to any agreement on immigration. After German leader Angela Merkel’s decision to allow more than 1 mln migrants into Germany over the last 3 years, she is now seeking to limit the number, in the process heightening tensions over who should take in refugees. Italy’s new nationalist government, which pledged to stop mass migration to the country as a cornerstone of its election campaign earlier this year, being the loudest voice in refusing any deal. The Italian Prime Minister Giuseppe Conte declared himself “definitely satisfied” with the outcome of the meeting, with another member of his government declaring ‘Merkel is going home empty-handed. There is no deal with Rome to accept asylum seekers that Germany would reject at the border’.

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