The continued strength of the Turkish Lira, dropping oil prices, increasing bond prices, robust consumer spending and easing regional tensions came together in October to make Turkish equity markets the most profitable for investors globally for the month. The benchmark BIST-100 was on fire the entire month and closed it out up nearly 14 percent in U.S. dollar and euro terms, and nine percent in Turkish lira terms. More importantly Turkey's equity markets are within range, only six percent remains, of all-time highs. Crude oil continued its slide hitting $86 dollars a barrel last week, while its American cousin, WTI fell to $80 a barrel, both multi-year lows for both commodities. The 26 percent drop in crude from recent highs is welcome news for energy-dependent Turkey as its balance of payment numbers have improved considerably, with data coming in better-than-expected at 6.93 billion Turkish liras versus downwardly revised expectations of 7 billion Turkish liras. This is great news for consumers and producers alike as heavily-taxed gasoline is one of the largest components of producer prices in Turkey and thus any drop in these costs give much relief to households and businesses across the country. The benchmark BIST-100 equity index was up at 80,683 near the close of trading on Monday. Nearly as important as price-action, volumes on the Borsa Istanbul stock exchange were also up for the month and therefore the run-up appears to be one with solid fundamentals. The Central Registry Agency's (MKK) foreign participation in the Turkish equity markets index continued to rise, gaining another 27 basis points last week. The participation rate had been 63.24 percent last week and was reported to be 63.51 percent on Friday. The index had dipped below 63 percent on Oct. 13, only to reverse course as foreign investors joined and helped the recent rally we've seen in equities. Fixed income markets joined equity markets in their rally last week as news out of the central bank of Turkey pointed to lower inflation forecasts for 2015. Erdem Başçi, chairman of the Monetary Policy Committee, gave positive guidance to markets during a press conference last week in which he noted the committee was expecting a steep reversal in inflationary trends and a decrease in the rate of inflation to six percent for the upcoming year. While inflation may be worrisome to some Turkish investors, it would be music to the ears of many foreign countries including most of the eurozone and Japan - nations which have experienced stag-deflation for several years or (in Japan's case) several decades . It appears a relatively modest, and more importantly, constant inflation rate ends up being beneficial to markets and it appears Turkey's inflation rate hasn't hurt investor sentiment at all.The benchmark two-year government bond traded up again for the week, trading at a yield of 8.41 percent, down 18 basis points in the last week. As yields and prices are inversely proportional in bond markets, a drop in yields implies an increase in prices. The long-end ten-year issue also traded up for the week with its yield dropping to 8.53 percent, down over 23 basis points from the 8.76 level where it had stood last week. A continued drop in bond yields would bring the bond markets to their highest levels in over a year, making government borrowing cheaper. Insurance against economic and political uncertainty denominated in credit-default swaps or CDSs continued to be cheaper for Turkey with rates now much below eurozone country Portugal. The CDS rates for Turkish corporate bonds traded at 1.74 percent as opposed to the 2.04 percent demanded by investors to insure Portugal despite the ECB's tacit backing. The Turkish lira continued to be better against the U.S. dollar albeit marginally, trading at 2.22 liras to the greenback versus 2.23 liras to the dollar a week ago. It is however much better versus the euro trading at 2.78 liras to the euro versus 2.83 liras to the euro a week ago. This is actually not bad news for Turkey, despite the fact that the eurozone is its biggest trading partner, Turkey's higher prices for its exports are not enough to move the European buyers elsewhere, however the cheaper import prices of European goods will leave a few extra liras in consumers' pockets. The "war" against ISIS continues in Syria as Turkey has helped move Kurdish peshmerga fighters from Kurdish controlled Northern Iraq to Syria to help fight to defend the Kurdish city of Kobani. As this battle eases look for Turkey to be more instrumental in dismantling ISIS and helping to move Syria toward democracy.