A Kurdish Peshmerga fighter takes a selfie with children after recapturing the Fadiliya village from Islamic state militants, in Nawaran North of Mosul. Photo: Reuters / Air Jalal

The Istanbul 30 index was up more than 1% in dollar terms this morning after US Secretary of State Rex Tillerson said that the ceasefire in southwestern Syria might be replicated on Turkey’s Syrian border as well.

Tillerson was widely reported to have acknowledged a crisis in US Turkish relations but expressed optimism that issues could be resolved. Translation: If the US and Russia make a deal to suppress fighting in Syria, Turkish President Tayyip Erdogan will have nowhere to go.

Erdogan has spent the past several years maneuvering between Washington and Moscow to gain advantage in Syria. Erdogan has played all sides in the Syrian conflict, cooperating with ISIS (including purchasing oil from ISIS-controlled Syrian wells) while notionally cooperating with the anti-ISIS coalition.

Most of all Turkey wants to prevent the emergence of a Kurdish-controlled zone along its border with Syria, which might in turn link up with the adjacent Kurdish autonomous zone in Iraq and lead to the creation of a Kurdish state. But if the US and Russia come to terms, Turkey will have to accept the outcome. Stabilization of the region would be a huge plus for the Turkish economy.

Asia Times Financial is now live. Linking accurate news, insightful analysis and local knowledge with the ATF China Bond 50 Index, the world's first benchmark cross sector Chinese Bond Indices. Read ATF now.