Equity markets closed lower around the globe as the Turkish lira remained under pressure - Westpac

Analysts at Westpac explained that equity markets closed lower around the globe as the Turkish lira remained under pressure despite central bank action. 

Key Quotes:

"Major currencies began to stabilize, including AUD/USD which traded in the high 0.72s, avoiding fresh 19 month lows."

"Emerging markets such as South Africa and Argentina continued to struggle."

"Today's data calendar features Australia Jul NAB business confidence, China Jul industrial production and UK Jun unemployment."

"The various measures announced by the Turkish central bank in early European trade Monday at least made TRY price action more two-way but the absence of an interest rate hike disappointed many analysts, leaving the lira down about 7% over the day."

"The contagion was clear in emerging market currencies such as the South African rand, which fell more than 2% for a third consecutive day and the Argentinean peso which hit another record low and prompted its central bank to raise its key interest rate from 40% to 45%."

"Major currencies however were little changed from late Sydney trade and there was a fleeting recovery on reports that Turkey would release the detained American pastor."

"This was denied by the US embassy in Turkey but in late NY trade the White House at least confirmed that the Turkish ambassador had met with US national security advisor Bolton."

"EUR/USD is about flat on the day around 1.14, not retesting lows since July 2017 that printed in Sydney trade. GBP/USD wandered around the mid-1.27s, flat on the day."

"USD/JPY bounced from 110.35 to above 110.90 on the reports of the pastor being released and steadied around 110.70 despite the denial. AUD/USD had slipped as low as 0.7251 in very early Monday Sydney trade, its weakest point since Jan 2017."

"It avoided a retest of that level during London/NY trade but wasn’t able to rally beyond 0.7290."

"NZD/USD ranged sideways between 0.6570 and 0.6595. AUD/NZD ranged sideways between 1.1035 and 1.1075."