MHMarkets:Turkey drops opposition to Finland and Sweden joining NATO

Finland's President Sauli Niinistö said on Tuesday that Turkey had agreed to support Finland and Sweden in joining NATO, clearing a major hurdle for the two countries to join the alliance. Turkey, Finland and Sweden signed a joint memorandum on the matter in Madrid on Tuesday in preparation for a major summit, Niinisto said in a statement.

Niinisto said the joint memorandum underscores the commitment of Finland, Sweden and Turkey to “full support in addressing threats to each other's security”. “The concrete steps we will take to join NATO will be agreed upon by our NATO allies within the next two days, but the decision is urgent now,” he added.

U. S. and European officials have been eyeing the summit for potential progress in pushing Finland and Sweden to apply for NATO membership. The two countries formally applied to join the security alliance in May, fueled by Russia's invasion of Ukraine. But Turkish President Recep Tayyip Erdogan has repeatedly said Turkey will not support the bid, accusing both countries of harboring members of the separatist radical Kurdistan Workers' Party (PKK), which Turkey regards as a terrorist organization . NATO Director-General Jens Stoltenberg said he was confident that Finland and Sweden could successfully join NATO after signing a trilateral memorandum of understanding.

Allied leaders will decide on Wednesday whether to invite Finland and Sweden to join NATO, adding that a ratification process will be required in all NATO capitals following that decision. The NATO chief said he was “convinced” that Sweden and Finland becoming NATO members was “certainly going to happen” following the signing of the trilateral memorandum.

Biden's national security adviser, Jack Sullivan, said U.S. President Joe Biden and Erdogan spoke on the phone ahead of the summit and are expected to meet on Wednesday. “We do hope that at some point tomorrow, President Erdogan and President Biden will have a chance to talk,” Sullivan told reporters on Air Force One, but added that details of the meeting were still being worked out.

Erdogan said that just earlier on Tuesday, Erdogan told reporters that he had a phone call with Biden before heading to Madrid and said that applications from Sweden and Finland to join NATO would be the primary consideration. Biden arrived in Spain on Tuesday for a NATO summit that is expected to significantly strengthen the alliance's defense posture along its eastern rim, including increasing troop numbers and deploying heavy equipment, as Western leaders consider the next phase of the war in Ukraine.

Financial data and events to focus on today:

18:30 Feds Mester discusses inflation expectations

20:00 German June CPI monthly rate initial value

20:30 Bank of England Governor Bailey delivers a speech

20:30 The final value of the annualized quarterly rate of real GDP in the first quarter of the United States

20:30 The final value of the quarterly rate of real personal consumption expenditures in the first quarter of the United States

20:30 The final value of the annualized quarterly rate of the core PCE price index in the first quarter of the United States

21:00 Speeches by the Governors of the Federal Reserve, the European Central Bank and the Bank of England

22:30 EIA crude oil inventories for the week from the United States to June 24

22:30 US to June 24 week EIA strategic oil reserve inventory

23:30 Feds Mester delivers a speech

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To be determined The 184th OPEC meeting will be held