At the end of the week, global markets were in a state of perturbation, caused by the crash of the Turkish lira. Concerns focus on foreign currency debt, especially of Turkish companies. The lira has lost 20% against the dollar since the beginning of August, which triggered an increase of unhedged foreign currency debt. This led to higher concerns about the Turkish banks and the European banks that provided the financing.
Germany will report Q2 GDP figures next week. The German data should be given special attention from the markets in many respects. First of all, Germany is by far the biggest economy of the Eurozone; secondly, it has been the engine of the economy so far, and finally, as the ‘global export champion’, it is the best indicator of how the trade disputes, which have existed since spring, affect the economy.
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