Citi's FX desk explains why Turkish markets are watching the US trial of a banker so closely.
The basics: The US government has accused Turkish banker Mehmet Hakan Atilla of helping Iran evade US sanctions.
Turkey's former economy minister, Zafer Caglayan, and two other banking executives, have been charged in absentia but Atilla is the only one on trial.
Why it matters: It's about the implications this has for US/Turkey diplomatic relations. Bloomberg has a good explainer here: 'The focus will be on whether [Zarrab] implicates Turkey's banking system or the highest levels of its government.' The worst case scenario would hypothetically be where the trial results in diplomatic penalties to Turkey and its banks.
An October 30 document submitted to the court by federal prosecutors in New York said that the US "anticipates that the evidence introduced at trial will show that Turkish government and banking officials were integral to the sanctions evasion scheme." Still, it's too early to tell, and we watch the wires closely for the latest developments.