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Week In Review


The Turkish central bank took steps to make it more expensive to short the lira and made it easier for banks to restructure problematic loans.  Turkey also imposed retaliatory tariffs on certain imports from the U.S.  The Turkish Treasury and Finance Minister ruled out capital controls and stated that stopping inflation and reducing the current account deficit are the top policy priorities.  The lira made some gains after these developments but remains down significantly for the year.

Our Take

Turkey’s financial problems will only be solved by a significant reduction in debt growth and higher rates to maintain the value of the lira.  However, both of these run counter to Erdogan’s economic program, and U.S. sanctions and tariffs only make Turkey’s reliance on foreign capital inflows even more of a risk.

Retail Sales

July retail sales rose 0.5%, exceeding economist estimates.  June sales were revised down to 0.2% from a previously reported 0.5%.

Our Take

Retail sales have been robust following the tax cuts.  This week’s report points toward economic growth of around 3% in the third quarter.


The Chinese Vice Commerce Minister will meet with Commerce Department officials in August to try to restart talks on resolving the current U.S.-China trade conflict.  These are lower-level talks than those in May, and the amount of goods subject to tariffs is still set to increase later this month.  Equities rose on news of the talks.

Our Take

Any opening of discussions to resolve the trade conflict is a positive development, but these talks are not a reason for too much optimism.  The lower level of the participants indicates that the key players in both countries do not want to commit to a negotiating framework yet.


This week marked the largest week of municipal bond issuance since last December.  According to Bloomberg, $11.8 billion of municipal bonds were scheduled to sell.  2018 municipal bond sales are 15% lower compared to last year.

Our Take

State and local governments rushed to market at the end of 2017 to access the municipal bond market before possible changes in the tax code occurred, so it is not surprising that this year’s new issuance is lower than last year’s.  This week’s calendar of new issues provides a boost to the low municipal bond supply.

All expressions of opinions are subject to change without notice in reaction to shifting market conditions.  All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness.  Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice.