Turkey Yields Rise From Record Low on U.S. Fiscal Cliff Concern

Turkey’s bond yields rose from the lowest level on record as investors took profit from riskier assets after global markets fell on concern U.S. budget talks have made little progress to avert the so-called fiscal cliff.

Yields on two-year benchmark debt climbed three basis points, or 0.03 percentage point, to 6.08 percent at the close in Istanbul, recovering from the weakest level since at least 2005. The yield has slumped 100 basis points this month in the biggest retreat among 20 emerging markets tracked by Bloomberg. The lira strengthened less than 0.1 percent to 1.7913 per dollar, its second day of gains.

U.S. President Barack Obama is scheduled to meet with business leaders today after Senate Majority Leader Harry Reid said yesterday he was disappointed with congressional budget talks aimed at averting $607 billion in tax increases and spending cuts. The MSCI Emerging Markets Index earlier slipped by 0.9 percent, the biggest intraday decline since Nov. 13, before paring its loss to 0.7 percent at 989.92.

“We are seeing sales in the whole of emerging markets and people are slightly taking profit,” Ertug Ali Aydin, a trader at Maxis Securities, said in e-mailed comments from London today.

Fitch Ratings upgraded Turkey to investment grade on Nov. 5 and central bank Governor Erdem Basci said on Nov. 12 he won’t tolerate any unwarranted currency gain jeopardizing the country’s external balances.

The Relative Strength Index on Turkey’s benchmark bonds fell to 13 yesterday. The gauge shows how rapidly prices have advanced or dropped during a specified period. Readings below 30 signal a security may be poised for a rebound. The measure increased to 16 today, remaining in overbought territory since Nov. 2.

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