More generally, we find that Turkey has made considerable progress in coming closer to the EU-27, but it remains vulnerable on the external side. Moreover, Turkey may lag behind the EU in the quality of its political and economic governance.

Arguably, the reform momentum has slowed considerably and the lack of progress with regard to EU accession negotiations has not helped. Absent an external anchor (IMF, EU accession) and absent a financial crisis, the incentives to embark upon far-reaching reform that would help propel Turkey to the EU average are limited. That said, smaller piecemeal reform continues. Future convergence in this area will continue to be very gradual, if our reading of the domestic political constellation is correct.

Eoin Treacy's view EU countries receive voting allocation based on their respective population sizes. This is in Germany's favour since it is both the largest economy and the largest population centre. One of the main obstacles for a country such as Turkey is that it has a large population but does not possess the economic heft of other major population centres within the EU. This suggests that it could be quite some time before Turkey becomes a full member of the bloc.

The Euro broke successfully above the TRY2.4 area to post new 18-month highs this week and a clear downward dynamic will be required to question medium-term scope for additional upside.

The ISE National 100 Index hit at least a near-term peak last week and a clear upward dynamic would be required to check current scope for a further test of underlying trading.