A strategic short on Turkey has run its course. Time to take profit.
Main drivers:
Nov-17: Erdogan interference with CBRT independence (to hike in defense of the TRY), domestic fundamentals (CPI hit 9-year high), brief/sharp global risk-off correction
Oct-17: EU-Turkey relations (Germany threatens to cut financing lifeline), US-Turkey relations deteriorated (embassy/visa issue)
Sep-17: Kurdish referendum
Re-engage if:
1/ After technical rebound
2/ Global risk aversion returns (on UST re-steepening post-US tax/fiscal breakthrough)
3/ Meaningful signs of sharply slower economic activity
4/ Economic sanctions threat gets louder