Istanbul 100

Yesterday when we discussed the dramatic crash in the Turkish lira, resulting from the visa suspension drama at both Turkish and US consulates, we noted that "this is the currency's seventh consecutive decline, after dropping on Friday amid concern Fed tightening would hurt EM currencies, and should it persist may finally have an adverse impact on other EM currencies, not to mention various other local Turkish asset classes when markets reopen in a few hours."

After soaring over 100% in the last 3 weeks, Sasa Polyster Sanayi - Turkey's best-performing stock of the year - crashed 19% at the open after regulators admitted investigations into potentially fraudulent transactions.

The regulator cited trading irregularities between March 24 and May 23, when the stock more than doubled to become the top performer on the Borsa Istanbul 100 Index.

Yesterday's weak dollar headfake has ended and overnight the USD rallied, while Asian stocks dropped to the lowest level in 7 weeks and crude oil fell as speculation returned that the Federal Reserve will raise interest rates as early as next month. The pound jumped and European stocks gained thanks to a weaker EUR.

While markets remain relatively subdued ahead of tomorrow's nonfarm payrolls report, after several days of losses in US stocks, which have taken "sell in May" to heart and pushed the S&P500 to three week lows, overnight markets ignored the latest weak data out of China where the Caixin Services PMI was the latest indicator to disappoint (dropping from 52.2 to 51.8), and instead focused on crude, which rebounded from yesterday's post inventory-build lows and briefly printed above $45/bbl over uncertainty related to the impact of Canada wildfires on production and how long will last.

"There’s a giant bull in the [Turkey stock market] china shop," exclaims one trader, but (unsually for Turkey), "nobody knows anything for sure" about who he, she, or it is. As Bloomberg reports, a mystery investor who first appeared a year and a half ago with $450 million of bets on a single day, almost double the market average, is now executing major transactions with increasing frequency, scaring away competitors who can’t figure out when he or she will strike next, traders and bankers said.