• Geo-political troubles in Turkey push the lira lower, whilst selling in EM currencies spreads to South African rand and Argentine peso. 
• Asian stocks fall further. 
• Euro slips as the usual safe haven yen, the Swiss franc, and the dollar bid up.
• Cryptocurrencies mixed in the aftermath of the ETF rejection by the SEC. 

Asian overnight: Asian markets exhibited a clear risk-off mood, with the fallout from the recent Turkish and Russian led selloff continuing to impact on market sentiment. Emerging market currencies have been under immense pressure last week and over the weekend led by declines in the Turkish lira. The major factors affecting Turkey and its currency (the Lira) are the economic sanctioning war it has entered into with the US as well as questionable economic policy which is said to not address the rampant inflation within the region. Turkish President Erdogan has battled against the recent selloff, stating that it was a foreign ‘operation’ against the country. With the ruble also selling off amid US sanctions, there is a clear rise in market worries over the developing markets.

UK, US and Europe: Looking ahead, we have distinct lack of economic releases to drive price action. We also see a slowdown in the earnings calendar, with few notable companies releasing their data throughout the week. With that in mind, watch for ongoings in Turkey as markets continue to react to the potential further decline in the Lira and the fallout for Turkish companies.

South Africa: The rand has followed other EM currency markets to trade at its worst levels against the dollar since November 2017. Global equity markets remain under short term pressure suggestive of a soft start on the Jse today. Tencent Holdings is down 2.3% in Asia which should see major holding company Naspers following suit, although the weaker rand might buffer some of these losses. BHP Billiton is down 1.39% in Australia, suggestive of a softer start for locally listed diversified resource counters. Local banking and retail counters are expected to be weaker on open today on account of the softer rand.  

Economic calendar - key events and forecast (times in BST)

Source: Daily FX Economic Calendar

Corporate News, Upgrades and Downgrades

• Chemring has said that profits will be £20 million lower than forecast due to an explosion at one of its flare factories. A knock-on effect in cash flow and net debt is expected as well. 
• Clarkson reported that pre-tax profit dropped 18% to £18 million for the first half, while revenue dropped to £152.6 million from £156.8 million. Depressed levels of sale and purchase activity, reduced rates in the tanker market and a falling US dollar were blamed. However, the firm said it was encouraged by the recent strengthening of the dollar, which suggest improvement in the second half. 

BAE upgraded to overweight at Morgan Stanley
Wilh Wilhelmsen raised to hold at Danske Bank Markets
Commerzbank upgraded to hold at Berenberg
BBVA downgraded to reduce at Kepler Cheuvreux
Bayer downgraded to neutral at MainFirst
Circassia downgraded to hold at Stifel
Meggitt downgraded to equal-weight at Barclay

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