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Analysts at Deutsche Bank, point out that ahead of Turkey’s election for this Sunday, in its inaugural dual elections, Turkey will be voting to elect 600 members to the National Assembly and a new President.

Key Quotes

“The latest polls point to the AKP+MHP alliance winning a majority in the Parliament and Erdogan retaining his Presidential mandate in the second round. That said, Kubilay highlights that momentum behind the opposition has picked up since mid-May, pointing to a non-negligible possibility of non-AKP majority in the Parliament confronted with an Erdogan Presidency.”

“Another possibility is full opposition victory in both elections, which seems a low likelihood event, based on current poll data. History suggests markets favour political clarity following the ballot, as manifested in the knee-jerk reaction after the June 2015 (negative) and the November 2015 (positive) elections.”

“Secondly, markets also look for clarity in macro policy outlook, depending on starting conditions. Dissipation of political uncertainty and advent of policy clarity are necessary but not sufficient. A sustainable rally requires accommodative global conditions, too.”