Turkish 10, 20, 50 and 100 lira banknotes sit on the counter of a currency exchange bureau in Istanbul, Turkey. (Photographer: Kerem Uzel/Bloomberg)

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Investors keep a close eye on Turkey as markets start the week jittery, with emerging-markets currencies particularly vulnerable, while Tesla’s ties to Saudi Arabia ramp up. Here are some of the things people in markets are talking about today.

Turkey Spillover

Turkey is set for another week of financial-market turmoil as its face-off with the U.S. shows no sign of abating. With concern over the policy making vacuum, the lira did pare losses late Sunday as the nation’s Banking Regulation and Supervision Agency stepped in to limit swap transactions on the battered currency.  The lira is down 25 percent in the past month with Recep Tayyip Erdogan maintaining his defiance toward the U.S. and financial-market orthodoxy in speeches on Sunday. Pressured by U.S. sanctions and a new constitutional order that concentrates power in Erdogan’s hands, Turkey’s central bank and finance ministry have done little more than monitor the worst market beating since the rout that took out much of the country’s financial sector in 2001. That led to an International Monetary Fund bailout and paved the way for Erdogan’s rise to power.

Emerging Currencies in Focus 

Emerging-market currencies looked set for another day under pressure as worries grew that Turkey's crisis may sap demand for assets in other developing nations. The South African rand and Mexican peso were both down by more than 0.7 percent. The yen extended Friday's advance as investors sought safe-haven assets. Equity markets in Japan and Hong Kong were set for declines. The S&P 500 Index slumped on Friday as Turkey’s crisis deepened. 

Coming Up

Traders will be looking for fresh details on Singapore's economy with the final data on second-quarter GDP due. There will also be Indian CPI later Monday, followed on Tuesday by China industrial production and retail sales. Wednesday delivers an Indonesian rate decision, while Thursday has Australian unemployment, Malaysia GDP and Japan trade on the docket.  Reserve Bank of Australia Governor Philip Lowe testifies before the Economics Committee on Friday. Markets will also be digesting any fallout from U.S. inflation figures that came out on Friday. Also on the radar, Brexit negotiations resume in Brussels -- British and EU negotiators must agree to the terms of their split by March. U.S. retail sales data is projected to show a sixth straight gain. 

Saudi Fund Eyeing Tesla 

Saudi Arabia’s sovereign wealth fund is in talks that could see it becoming a significant investor in Tesla as part of Elon Musk’s plan to take the electric car maker private, according to people with knowledge of the fund’s plans. The Public Investment Fund, which has built up a stake just shy of 5 percent in Tesla in recent months, is exploring how it can be involved in the potential deal, said the people, who asked not to be identified talking about the matter. Discussions began before the controversial Aug. 7 tweet by Musk, who is Tesla’s co-founder and chief executive officer, saying he was weighing a plan to take the company private.

PetroChina’s LNG Rethink

PetroChina Co. may temporarily halt purchases of spot U.S. liquefied natural gas spot cargoes through the winter to avoid potential tariffs amid a trade conflict between the U.S. and China, according to sources with knowledge of the strategy. Under the plan, PetroChina would boost buying of spot cargoes from other countries or swap U.S. shipments with other nations in East Asia to avoid paying additional tariffs, said the people, who asked not to be identified because the information isn’t public. PetroChina, a unit of the state-owned China National Petroleum Corp., couldn’t immediately comment when contacted by Bloomberg.

What we've been reading

This is what's caught our eye over the last 24 hours.

  • China says won’t use yuan as tool to cope with trade. 
  • Hedge fund splits with Morgan Stanley on dollar. 
  • Rupiah headwinds ahead of Indonesian rate decision. 
  • BOJ’s ``stealth tapering’’ seen spreading to equities. 
  • China’s banks are not lending more money. 
  • Iran sanctions give China lead on top gas field. 
  • A Tasmanian wilderness could become giant battery.

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