Turkish elections were held on Sunday, May 14 and results turned out to be inconclusive. The key takeaway is that no single candidate managed to get over 50% vote threshold in the presidential elections and a run-off between incumbent president Erdogan and opposition candidate Kilicdaroglu.
Election results
There are no full, official results of the Turkish presidential elections yet. However, both official, partial results as well as preliminary results presented by opposition media suggest that neither of the candidates managed to reach the 50% threshold needed to win in the first round. As a result, a run-off will be needed between Erdogan (around 49% of votes) and opposition candidate Kilicdaroglu (around 45% of votes), and it will most likely take place in two weeks on Sunday, May 28.
Preliminary results of parliamentary elections, which were held on the same day, showed that Erdogan's AKP won 35.58% of votes and 268 seats in the 600-seat parliament. However, together with coalition members, Erdogan's bloc got over 49% of votes and a majority of seats needed.
While Erdogan managed to retain power in parliament, this was the worst showing of his party since he came to power in 2002. Moreover, failure to win in the first round of presidential elections shows damage done to his support by rampant inflation or poor response to recent earthquakes. However, as Turkey transitioned into more president-oriented rather than parliament-oriented ruling system in 2018, results of presidential elections run-off will be far more important.
Market impact
Reaction of the FX market to results has been minimal so far and it is rather unlikely to change as run-off looks like a done deal. Erdogan and Kilicdaroglu making it to the second round of voting was a base case scenario and uncertainty remains. Win from Erdogan in the second round of voting could see the lira weaken slightly while a Kilicdaroglu win could provide support for the currency as it would hint at reforms and normalization in monetary policy. Stock market is a different story as it launched today's trading with an over-6% slump, triggering a circuit breaker.
EURTRY launched new week's trade lower but managed to bounce off the 21.20 support zone, marked with 23.6% retracement, 200-period moving average (purple line, H4 interval) and previous price reactions. The pair rallied and is moving towards the 21.46 resistance zone, marked with previous price reactions and 50-period moving average (green line). Source: xStation5
