Turkey - where is the market love?

Lira pretty flat today.

Interesting that Turkey's deal with the SWINNS over NATO membership, which kind of signals better relations with the US and Europe, is making little impact on Turkish markets.

A few ways to think of this:

a) A deal might have already been in the price;

b) At least a crisis was averted in relations with NATO and the West;

c) Show me the money - Turkey faces a tortured BOP outlook, and how does this change that in any way? It is not as though the US/NATO allies are providing $$ to Turkey. More importantly therein is if the MBS trip last week brings big $$ investment. We are all still waiting.

D) Key for market this year will be elections, and whether the result leads to change of policy from currently unsustainable and plainly worrying monetary policy settings. This could come with/without Erdogan at the helm. How has this deal changed the maths there? Not clear really. Erdogan has again shown his pragmatism, avoiding a crisis, taking some political capital from the F16 and Kurdish deal which he will hope to deploy domestically in elections. But the election outcome is still mega uncertain.

E) Turkey now fits into the EM high yield country category and with the rest of EM HY getting trashed no change is outperformance. True perhaps for the lira and equities but Turkey credit is following the rest of EM HY lower.

Maybe the market just does not want to show EM in general the love at the moment.