Turkish Referendum: Local Markets Rally, But For How Long?

Posted by Darcie Sunnerberg, Senior Sovereign Analyst on Apr 21, 2017 2:16:07 PM

So far, the market’s reaction to Turkey’s historic referendum on the adoption of a national presidential system on April 16 has been positive, with local bonds and the currency rallying. Despite a slim margin, this was a major win for President Erdoğan and the Justice and Development Party (AKP). The results lead to further consolidation of power under Erdoğan, who now controls the media (TV, radio and news), the police and the judicial system.

I anticipated this result would be a favorable outcome for Turkish lira (TRY) and the bond market for the short term as it would eliminate a key lingering political uncertainty. However,  longer term this result is likely to be quite negative for Turkey and there are still many questions to monitor.

In my view, the extent of the current rally will depend on the outcome of the following factors/risks: Read More

Topics: Macro Strategies, Sovereign Research

Dutch Election Results: What Do They Mean for France?

Posted by Laura Sarlo, Senior Sovereign Analyst on Mar 21, 2017 1:11:32 PM

Global markets breathed a collective sigh of relief last week when it became clear that Geert Wilders’ anti-European Party for Freedom (PVV) did not win the most votes in the March 15 Dutch election.

But did populism lose? Is the populist wave over? Not so fast. Prime Minister Mark Rutte adopted some populist and nationalist rhetoric during the campaign –remember that he ran ads this past January in all major Dutch papers telling immigrants to “act normal or leave.”

 

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Topics: Macro Strategies, Sovereign Research

2017 Market Outlook: 15 Experts On What To Watch

Posted by Orla O'Brien, Media Specialist on Jan 3, 2017 8:30:00 AM

 Every six months, we share insights from Loomis Sayles portfolio managers and analysts; what are the current themes and risks shaping their investment decisions? Looking into 2017, geopolitical shifts, rising rates, regulatory changes and new proposed policies from President-elect Trump will all be key factors. 

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Topics: Quantitative Research and Risk Analysis, Credit Research, Macro Strategies, Sovereign Research, Equity Research, Bank Loans, Emerging Markets, Fixed Income

Italy Rejects Constitutional Reform Referendum

Posted by Laura Sarlo, Senior Sovereign Analyst on Dec 6, 2016 3:46:43 PM

Italy rejected Prime Minister Matteo Renzi's constitutional reform in Sunday’s referendum, as polls had predicted. But Italian voters didn’t just say “no,” they said “hell no!” with 59.1% voting against and 40.9% voting in favor. The magnitude of the rejection surprised financial markets, although the price impact has somewhat dissipated already.

We expect President Mattarella to select a leader for a caretaker government that will modify the current electoral law and then move to new elections sometime next year, ahead of the scheduled elections in 2018. The populist Five Star party (M5S) had fiercely opposed the electoral law, but is now pressing for immediate elections given that polls suggest M5S would win a strong mandate under fresh elections using the current electoral law.

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Topics: Sovereign Research

Loomis Sayles analysts are career professionals who offer deep knowledge and experience in a diversity of global asset classes and market sectors. These dedicated experts provide the insight essential to supporting our portfolio management teams across a wide range of investment strategies.


 

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