Turkish leader Erdogan criticizes central bank’s rate hike

Erdogan appoints himself chairman of Turkey's sovereign wealth fund

Erdogan appoints himself chairman of Turkey’s sovereign wealth fund

World stocks bounce on U.S.

In another speech on September 13, Erdoğan also underlined the launch of a comprehensive saving movement in the public sector, adding that the financial sources would be poured into projects closest to being finished.

Turkish President Recep Tayyip Erdogan has accused the United States of launching what he called a "heinous economic attack" on Turkey after the national currency lira hit a record low following USA sanctions.

The warning came after his USA counterpart, Donald Trump, escalated a feud by doubling tariffs on metals imports.

Turkey's central bank surprised markets on Thursday with a bigger than expected rate hike to battle soaring inflation and boost the lira, prompting the embattled currency to surge in value.

The MSCI All-Country World index, which tracks shares in 47 countries, was up 0.4 percent on the day by afternoon trade in Europe.

Led by technology and autos stocks, the pan-European STOXX 600 index rose half a percent, set for its best weekly gains in seven weeks.

"There have been a lot of obvious headwinds to risk appetite over the summer", said State Street Global Markets' head of global macro strategy Michael Metcalfe.

"We will see the result of the Central Bank's independence". Trump had earlier threatened to impose tariffs on practically all imports from China unless the country offered concessions.

"While the potential for a trade deal in the near-term remains low, a resumption of dialogue could lift sentiment and support markets, in our view", analysts at Credit Suisse wrote in a note to clients.

US producer prices unexpectedly fell in August, recording their first drop in 1-1/2 years and denting talk of accelerating inflation following last week's strong jobs and wage data.

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A slackening of inflation could slow the Federal Reserve's pace of rate hikes, and USA bond yields fell to session lows after the release of the consumer price report, before rebounding.

The 2-year US2YT=RR Treasury note, heavily influenced by Fed policy expectations, fell 1/32 in price to yield 2.7606 percent, from 2.748 percent late on Wednesday.

The lira's plunge amplifies heaps of worry spots for the Turkish financial system: as global ardour fee rise and the dollar strengthens, Turkey's worldwide replace-denominated debt - which amounts to 50 percent of its imperfect home product (GDP) - becomes increasingly painful to finance.

Before the move by policy makers in Ankara Thursday, the run on the currency forced the central bank to deliver some tightening where it could.

Currency crises in both Turkey and Argentina have stoked fears of contagion over the past several weeks, hammering emerging market assets from Indonesia and India to South Africa.

The Turkish lira weakened by 3 percent against the dollar following Erdogan's speech, trading at 6.53 per dollar.

Those rises followed gains on Wall Street Thursday, with the Dow Jones Industrial Average ending 0.57 percent higher, the S&P 500 gaining 0.53 percent and the Nasdaq Composite adding 0.75 percent.

He criticised the central bank, saying it had consistently miscalculated inflation targets and again portrayed the currency crisis as a foreign conspiracy.

But Neuteboom of ABN Amro said much more was needed for Turkey to turn around "the negative spiral" the economy is in.

Earlier Wednesday, the US dollar/Turkish lira exchange rate stood at 6.4440 as of 9.30 a.m. local time (0630GMT).

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