Turkish bond yields rose on concern that a possible slowing of quantitative easing in the U.S. may reduce capital inflows into emerging markets.
Yields on benchmark notes climbed for the second day, heading for the highest since Feb. 13, after data showed on March 8 a larger-than-forecast surge in job growth in the U.S.
“Friday’s data is having a strong impact on the market and is causing a negative climate,” said Arinc Yurtkuran, a fixed-income trader at ING Bank AS in Turkey. The speculation is that “whether an exit from quantitative easing will start to be talked about,” he said.
Yields on two-year bonds rose four basis points, or 0.04 percentage point, to 5.82 percent at 3:58 p.m. in Istanbul. The lira appreciated 0.1 percent to 1.8040 per dollar, paring its loss this year to 1.1 percent.
Employment in the U.S. rose 236,000 in February for the third monthly increase above 200,000 in four months, pushing down the jobless rate to a four-year low of 7.7 percent, according to the U.S. Labor Department data released on March 8.
“After the strong date in the U.S., we see selling in the longer maturity U.S. treasuries and Turkey is not immune from this,” Selim Gulkan, a fixed-income trader at Turk Ekonomi Bankasi AS, said by telephone.
Turkey’s two-year yields rose for the last two weeks, paring their fall this year to 36 basis points.