• Matthew Fotheringham

November 22nd, 2019 - 3 Things That Happened This Week



USD TRY EUR

1. Turkey ceasefire successful, kind of, and Erdogan opens up Turkey for business


President Trump declared the ceasefire as "successful" and even felt comfortable enough to lift the sanctions placed on Turkey. However, Turkey's Foreign Minister, Mevlüt Çavuşoğlu said that there are "violations of the agreement done by both parties". 

Meanwhile, Mr Erdogan urged entrepreneurs to invest more in Turkey and is hopeful that he will see further interest rate decreases throughout the rest of the year and into 2020. He also confirmed that Turkey will be looking to use the Turkish Lira, rather than becoming indebted to foreign currencies such as the EUR or the USD.

TRY weakened against the USD to rest at 5.718, but has strengthened considerably since October.


CAD USD

2. There is a rail strike in Canada and it's already affecting the economy

3200 CN employees decided to strike on Tuesday over fatigue and safety caused by shortened worker’s breaks. CN is Canada's largest railway in both size and revenue and Canada's only transcontinental railway. 

What's the impact:

  • Factories are already cutting production and some of the larger chemical companies are expected to lose as much as CAD$1m a day.

  • Agricultural workers are also feeling the pinch as they rely heavily on the CN network to export commodities such a wheat and canola seed. The contracted volume of these alone are 21m and 9m tonnes respectively.


The major issue is that Prime Minister Trudeau’s Parliament is not set reconvene until December 5th. Conservative leader Andrew Scheer has used the strike as a catalyst to reconvene early, but nothing looks set to be happening before November 25th.

USD/CAD initially weakened 1% on Wednesday currently testing the support level of 1.328.

ILS

3. Netanyahu in hot water as he is indicted on charges of bribery, fraud and breach of trust

Mr Mandelblit (Netanyahu’s former cabinet secretary) has officially accused Prime Minister Netanyahu of 3 instances of corruption.

What's he accused of:

  1. Involvement in a media bribery scheme in which Walla owner Shaul Elovitch provided positive coverage of the PM, in exchange for government polices favoring Bezeq, a company also owned by Elovitch.

  2. Receiving $260,000 in gifts from other businessmen in exchange for a variety of help with business and personal-legal activities.

  3. A quid pro quo deal with Arnon Mozes of Yedioth Ahronoth Newspaper, the deal didn't go through, nevertheless can be construed as attempted bribery and breach of trust.

The indictment does not mean that Mr Netanyahu is required to step down and in a statement on Thursday He rejected his indictment claiming it as an “attempted coup” against him, that the accusations made were “false” and that the “investigation” was tainted.

USD/ILS (3.464) remained relatively unscathed at the time of the announcement.

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