LONDON (Reuters) - Following are five big themes likely to dominate thinking of investors and traders in the coming week and the Reuters stories related to them:

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 18, 2018. REUTERS/Brendan McDermid

1/TESTING THE TAPER TANTRUM

Five years ago, the so-called Taper Tantrum sent investors fleeing emerging markets. Since then, the sector seems to have built resilience to the kind of rolling selloffs that racked them in past decades, when a crisis in one country fueled domino-effect selling across the developing world. Now, the rout in Turkey’s lira is testing that resilience.

The lira has suffered its biggest weekly loss since Turkey’s own 2001 financial and banking crisis; without major action from authorities, it may tank further. Then, there is Russia’s rouble which is at fresh two-year lows after more U.S. sanctions were imposed. And the rest of the emerging market complex appears finally to be cracking. In reality, Turkey’s woes should not directly affect the economy of, say, Mexico. But fund managers hit by losses on Turkish holdings will be looking to recoup the money by selling other emerging assets in their portfolios. The second channel is the dollar which may soar if investors sell assets denominated in the rouble or the peso. So unless the lira bleeding is staunched, torrid times may be ahead for emerging markets.

Emerging market currencies slide: tmsnrt.rs/2vzelu5

2/BREAKING UP IS HARD TO DO

Some divorces are amicable, others not so much. Britain’s long, drawn-out split from the EU, whatever the protagonists say publicly, is getting messier. The risk is it gets ugly. That’s how currency traders are playing it now, slamming the pound to its lowest in over a year against the dollar (below $1.28) and almost a year against the euro (now above 90p).

Futures market positioning and options pricing show bets on further weakness as the probability of a no-deal, or hard Brexit rises. But is sterling on a one-way road south, or is the doom and gloom overdone? The Bank of England struck an upbeat tone when it raised rates this month, Q2 GDP growth was a reasonable 0.4 percent, and outgoing BoE hawk Ian McCafferty reckons wage growth may hit 4 percent next year. Plus, hard Brexit is in neither side’s interest, so some sort of deal will be struck. Maybe so, but the FX market’s outlook right now is definitely glass half empty. On next week’s horizon, traders will be able to get their teeth into the latest snapshots of UK inflation, employment and wages, and retail sales. These may determine whether sterling carries on falling toward $1.25, or recovers to $1.30.

Sterling positions - CFTC: reut.rs/2vwsyYG

3/LOSING APPETITE

Over the past decade, Japan and China have jockeyed back and forth as the No. 1 and 2 foreign holders of U.S. Treasuries. But their appetite for U.S. debt has slackened notably from their peaks during the Federal Reserve’s quantitative easing era, however, and Japan’s holdings have been edging ever closer to dropping below the $1 trillion mark for the first time since Sept. 2011.

Whether that milestone was breached in June will be revealed next week, when the United States delivers its Treasury International Capital System (TICS) report on foreigners’ holdings of government debt.

Data this week from Japan’s Ministry of Finance showed Japanese investors sold U.S. bonds again in June, to the tune of $4.09 billion amid expectations of steady interest rate hikes from the Fed.

Foreign holdings of Treasuries: reut.rs/2OsTe3F

4/ZERO HOUR

Close on the heels of this week’s foreign exchange reserves data from China, come next week’s numbers on whether state banks purchased dollars in July - as they did in June and May.

That data is important because markets are trying to figure out why Chinese reserves rose last month, despite a trade war and a yuan fall to 14-month lows. State banks have carried on buying dollars, suggesting the economy isn’t seeing the sort of capital flight that accompanied currency weakness bouts in 2016 and early-2017.

But the yuan is a whisker away from 7-per-dollar, the level China defended in 2015-2016 by selling a trillion dollars. So can markets expect a hard stop as the 7-mark approaches? Will that mean state-run banks will sell the dollars borrowed via swaps? Or is the line in the sand determined by the trade-weighted yuan basket? That is pretty close to the 92-mark, the level economists deem sufficiently weak to support growth and exports.

Does the PBOC have a line in the sand?: reut.rs/2MbCOiB

5/STOCK TRADE

Results-day stock moves have been unusually sharp both in Europe and the United States this season, a telltale sign of investor anxiety in an ageing bull market despite buoyant earnings.

European stocks had their biggest swings in 15 years after results, Goldman Sachs analysts found, while U.S. stocks moved an average of 3.9 percent.

Why the rise in volatility? Earnings, on the face of it, have been very strong.

Year-on-year earnings growth for the S&P 500 this quarter stands at 25 percent, more than double the still-strong 12 percent managed by MSCI Europe companies. Analysts are rapidly revising up global earnings estimates.

But sales figures are beginning to show pressure on companies’ margins from tariffs, fuelling fear that rising protectionism could bring a late-cycle market to its knees.

Companies have downplayed the impact of trade war, but vulnerable sectors - such as European luxury, capital goods and carmakers - have been especially volatile.

Global earnings revised up: reut.rs/2vtGfHN