Markets Hit by 10% Lira Plunge

In the first sign of the Turkish Lira downfall is entering crisis territory, the supervisory body of the ECB has reportedly (according to the FT) begun looking a various European banks' exposure to Turkey (BBVA, UniCredit and BNP Paribas). The lira lost as much as 10% earlier in the day to break the 6.00 territory vs USD. The yen is gaining all currencies, followed by USD, while gold struggles to rise off the $1205 support. Markets await US CPI and Canada jobs at 13:30 London. The short DAX trade was closed for 230-pt gain, while the EURUSD was stopped out. Yesterday's index short is in the green, and a new trade will be issued ahead of the US session.

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Cable is falling for the 7th consecutive day amid escalating fears (and possibilities) of a no-Brexit-dea, while GBPJPY breaks below 142, now eyeing 139.00. The euro is now threatening a breakdown towards 1.1360 after damaging a crucial symmetrical triangle.

The Fed's Evans helped confirm the central bank's intention to hike twice more this year. He said the debate about continuing gradual hikes will intensify next year. Between the lines: the debate won't take place this year with hikes basically baked in.

USD re-emerged yesterday despite flat PPI compared to a 0.2% rise expected. That sets up today's CPI release, which is forecast to rise 2.9% y/y. The one-off items that Yellen lamented last year are beginning to roll off now and that should slow inflation.