the lira continues to slide turkey central bank says foreign investors are increasingly turning away from turkish equities and government bonds analysts few the an element of is temple's merrill elections as an attempt by the president to recast the results in his party's favor the rule of law reason to question for many years ratchet tie a bad one was viewed as the man behind a booming bosphorus in the 1st quarter of 2017 turkey's economy grew by 5 and a half percent riding a huge wave of state at best months but that was the crest of the wave a downturn that began in the 2nd quarter of that is soon cut economic growth in half it came to a standstill in the 3rd quarter of 2018 with bills jew for all that say debasement and foreign investors began to grow wary of the increasingly autocratic president putting clear under more pressure the turks everything is getting more expensive we turn to analyst now from the university of applied sciences in konstanz to talk about the economy in turkey and whether or not turkey can stop the lira from falling what are its chances what's the governm

turkey's central banks are spending one week options. ramatically in the last -- has weakened dramatically in the last 20 minutes. the vix, 21.5. the german two-year, like deutsche bank, cannot get out of its way. francine: i am looking at the same thing, stocks globally as the deadline is approaching and we have a count loan -- countdown clock. it is the deadline approaching for u.s. and china to raise gold andl tariffs, so treasuries are climbing as people are looking for havens. tom: this is from the brilliance of david rosenberg yesterday, cautious on the american economy. labor pool population adjusted in the united states, a stunning move back to the 1970's of fewer employed americans. too much to talk about. francine: we are looking at china's renminbi sliding to the weakest level since january. one,ility for the yuan -- volatility spread spikes again. tom: we have two wonderful started, martin schenker, andrty peter hooper from deutsche bank. dr. hooper does not speak on deutsche bank policy and executive positions. we need to get

in turkey, the central bank unexpectedly raised borrowing costs in an attempt to bolster the lira.spended its one-week auctions that effectively raises the cost to borrowing for banks by 150 basis points. the cheapest rate had been 24%. the lira trimmed losses after the move. president trump is putting more pressure on iran to keep it from developing nuclear weapons. he banned the purchases of iranian metals after the reports that it may be enriching uranium at discouraging companies from doing business with iran. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm kailey leinz. this is bloomberg. alix: thank you so much. for more on iran and where the u.s. and iran are, joining us on the phone is richard nephew, senior research scholar at the center of global policy. theas also director of national security staff at the white house in 2011. there's no other person we want to talk to when it comes to iranian sanctions. what did you make of the news yesterday that we now have sanctions on thi

turkey. plus — the fed defies trump. the us central banks there's no case for a move on interest rates either way, ignoring the president's appeals for a cut. and on the markets: comments by the fed chief confounding market bets that the next move on rates could be down. that hits us stocks but boosts the us dollar. japan and china markets closed for a public holiday. we start with oil, because as of today the us is tightening its sanctions on iran's oil industry, imposed last november over the country's nuclear ambitions and policies in the region. that's raised fears of a squeeze in global crude supplies, which could push up prices further. let's show you some of the details. washington had granted 180—day waivers to eight countries including china, india and turkey, allowing them to keep buying iran's oil despite the sanctions. last week it said they had to stop by may 1st or face sanctions themselves. you can see how that news pushed up the price of benchmark brent crude, although it has fallen back a bit. it's still up by almost a thir

turkey. plus — the fed defies trump. the us central bankcut. and on the markets: comments by the fed chief confounding market bets that the next move on rates could be down. that hits us stocks but boosts the us dollar. japan and china markets closed for a public holiday.

the central bank in turkey cutting its literary -- lira rate. currency weakening. move, but just thought we would mention it to you. former south african president jacob zuma appears in high court on fraud, corruption, and money laundering charges. racketeering as well today. we are looking at live pictures of that. south african expected to continue until the 24th of may. we will keep you updated on the state of jacob zuma. anna? anna: we are going to talk about charts next, your favorite part of the program. time for battle of the charts. i enjoy judging this segem ment you have been struggling. what chart to use. i was going to suggest the breakevens chart. i understand you found a better one. matt: i have got one here and they goodness i have hillary -- thank goodness i have hillary putting together charts. this shows inflation. hang on a second, this is not the chart i wanted. i think i have a little bit of a better chart showing that basically the tariffs we are seeing are working, in terms of pulling up the cost of goods on out?se -- can

turkey's inflation rate is now at twenty percent the highest in a decade experts say the central bank needs to raise interest rates to keep inflation down but that's not something that sits well with a turkish president who thinks lower interest rates would make the economy grow faster and pointing to economic gains could helping shore up support for his party but economists warn that his strategy would only temporarily stimulate the economy and would be unsustainable in the long run. africa's farmers are a step closer to harvesting the benefits of digital technology growers and policymakers met in dakar senegal at the start of this week to compare notes at an event sponsored by the french government take a look. much of africa's farming involves low tech traditional methods but many african farmers are firmly in the twenty first century digitalize in their agricultural workflows farmers here at the agri numa in dakar want to improve yield and efficiency. the opposite i'm on there you can really say that there's a digital revolution taking place in africa at the moment it's a real hot

uranium oil iran's largest customers are china india south korea and turkey no longer qualify for an exemption any dealings with iran central bank another state owned financial institutions is considered a violation by the u.s. government there are restrictions on firms selling commercial airplanes and cars to iran iranians can no longer buy u.s. dollars or trade in precious metals imports of iranian food and carpets are also burned the u.s. government says any country company or individual who violates the sanctions could themselves face sanctions or criminal charges in the united states one of those countries where those american sanctions are most problematic is iraq which shares a long border with iran for tells us how the government in baghdad is coping. iraqi foreign minister mohammad al hakim met with u.s. diplomats here in baghdad last night for talks what the foreign minister described were focused on promoting bilateral tie and efforts towards solving regional crises and up routing terrorism but nobody here is under any illusions as to the focus of those talks and that namely is the increasing pressure by washington on

central bank has been notably reluctant. to apply the orthodox remedy of an interest rate increase to stem the lira slide and the related problem of one thousand percent inflation present and one of turkey meanwhile has railed against high interest rates and seems to have secured strong influence if not defacto control of the turkish central bank the bank now seems to be trying to get some of the results of a rate increase without declaring one the central bank has effectively tightened the supply of lira by suspending the one week week repo options at their lowest rate of twenty four percent the bank expects this move and changes to foreign currency reserve requirements to take about two hundred million dollars worth of foreign exchange liquidity out of markets. on the eve of their initial public offering and one day after a driver strike right hilling started has chosen to settle claims brought by board than sixty thousand drivers demanding that labor recognize their status as an employee's hoopers business model designates drivers as independent contractors under existing employment law not status imposes costs on dr years rather than and the issue has been central to complaints abou

covered this in detail, and there is so much going on, nato versus turkey, the russia missile order , local elections, the central bankization continuously. it is only a few months at the current rate for they are depleted -- before they are depleted. you need something to change and i cannot see it from the politics or what the locals are doing. it has to be a market reaction. tom: let me ask the official question for all of nomura -- it appears the idiosyncratic nature of this has increased over the last six weeks. turkey is more removed from the rest of your world, is that right? jordan: it is. when the turkish devaluation happened last year, we saw euro-yen go lower because japanese investors have been highly involved in turkey when it comes to buying turkey, a high returnand a given the risks. the correlation is a lot lower. folks have de-risked and taken into account the risk around turkey. it is no surprise turkey is falling in value. it is the idiosyncratic story and it is not moving on the markets like last year. francine.ead, francine: what is your take on emerging markets? jordan: the dollar outperformance

central banks announced policy decisions. let's talk about the latest news hitting markets in china, turkey, around the world.ink it will be deemed an overreaction, particularly given the media blackout in china? especially given that they were just coming back from a labor day holiday. they were offer about three days, then they came back. the big news we saw was president trump threatening more tariffs. we saw this huge reaction, especially on the offshore yuan, which has fell the most since the devaluation in 2015. the yuan continues to plunge against the dollar but also the shanghai compile it -- shanghai composite falling. an overreaction, perhaps. but also because there was so much trade optimism already baked into the markets. joe: what were the reverberations from the yuan move and the mood overall across the landscape today? >> you definitely saw the yuan leading the charge in terms of em weakness across the board. the yuan actually wasn't the weakest em currency today. across the world, not just em. that is really as we see this political uncertainty come back. the big news today was that turkey ord

central banks had to step in. how do you deal with the lira and monetary policy in turkey?s: first there is a deferral on the consumer side. then investors start referring their investment decisions. after that, there are some collection periods in the market. if it stabilizes, we go back into the normalization period in emerging markets, you are used to working with volatility not only leveraging your risks effectively. we have been lowering our leverage every year with sizable free cash generation. do you plan on more expansion -- vonnie: do you plan on more expansion in the u.s.? baris: yes. we would like to grow more in this space. that,s basically the area if it into's into our industrial they will be opening a new office. is one of the attractions of these businesses that they earn in dollars? i am wondering how you view the world from a currency hedge point of view. buying businesses in the states and in europe would certainly help that. have: sure, but we selected four areas of growth. one was composite. [indiscernible] one is on our people, and the last one is we n

turkey. what do they need to do to stop the devaluation of currency? simon: it would be lovely if the central bank in a position to push monetary policy hi. they were doing a very good job today of hiking rates by the backdoor to make it rather more attractive for people to put their money into the turkish lira, but beyond that, it is very difficult to see. of course, this has ultimately been about politics. it has been about the istanbul election story. from that perspective, that looks like further idiosyncratic risk. the interesting bit is it doesn't seem to be the spillover effect here in terms of feeding into additional risk, negative risk sentiment. if you look at the eastern european currencies, they haven't been hit at all, things like the check kronor -- the czech kronor. it seems the markets can only focus on one thing at a time. taylor: if there is no spillover effect yet, what do you need to see to get you to invest in some of that local currency instead of a dollar-denominated look at local currency? is it making sure there is political stability or monetary independence away from the

biggest customers china india south korea and turkey now face sanctions themselves if they continue to source or oil from iran any dealings with iran's a central bank and other state owned financial institutions are considered a violation there are restrictions on firms selling commercial airplanes cars and parts for them to iran iranians can no longer buy u.s. dollars or trade in precious metals imports of iranian food and carpets are also banned well the u.s. government says any country company or individual who violates these sanctions could themselves face sanctions or criminal charges even in the united states has more now from tehran. in a strongly worded statement iran's foreign ministry condemned the latest u.s. sanctions this time targeting iran's metals industry iranian foreign ministry spokesman abbas mousavi said the u.s. moved in once again violated america's international commitments he threatened legal action and said the united states would be held responsible for damages resulting from these latest sanctions but experts say existing sanctions have already made things so bad that more sanctions are unlikely to make things much worse

speed rail in its banks and in turkey protesters were detained after they attempted to march to a government hand over security concerns police i directed barriers around a square in central istanbul and blocked access roads. u.s. attorney general limbaugh is defending his actions over the release of the report findings in front of the senate says the special counsel behind the russian investigation recently confronted bar over his assessment of the probe now democrats are calling for bars immediate resignation claiming he misled the american public over the results of the russian probe. attorney general baum misled the public and owes the american people on says it's time for d.o.j. to release the fool report and on the line docs and find in the end no myrna to testify americans deserve the facts bar must stop standing in the way for anyone out there who still down today it is let's it shows that attorney general has always been the chief propagandist for president trump he's full page let's a totally misled congress and the public he should resign immediately and many democrats were expecting that the special counsel report from robert muller would contain some kind of

turkey, and china, but looking ahead, we can model what would happen if the trade tension were to continue. francine: what does it mean for what countries need to do? trade can't -- tensions continue. to central banks: that is a good point. we also underline how much global growth has been much too , and for monetary policy how important it is to consider , fiscal policy and structural policy. the one message we send for that beyond trade negotiations is first, invest. and callsates are low for the fed are to be low. in terms of reform, competition reform, the digital transformation we are seeing requires government to act fast. tom: i want to rip up the script. the telegraph published seconds ago, talking about an e.u. financial policy that is "back to the ice age." how restrictive are central policy whenntral rates are coming in solo? lawrence: i would distinguish two things. policy, which i think is hugely accommodative, but obviously with a flat yield curve, if the bank's business model is not as good as it should be, that is one thing. now -- clean p&l and modernize the business model. , it is one oftive the reasons why the emerging markets took a hit. they have loosened since then. we should