Turkey’s bond yields rose to their highest level in more than seven weeks after U.S. jobs data boosted speculation the Federal Reserve will taper stimulus and as the government in Ankara prepared for a debt sale tomorrow.
Yields on two-year bonds jumped 21 basis points, or 0.21 percentage point, to 8.81 percent at 5 p.m. in Istanbul, the highest level since Sept. 17 and extending their advance this month to 100 basis points. The lira weakened 0.1 percent to 2.0392 per dollar.
Fed Bank of Minneapolis President Narayana Kocherlakota and Atlanta counterpart Dennis Lockhart will speak tomorrow. U.S. employers added 204,000 workers in October, compared with a Bloomberg News survey median for a 120,000 increase, the Labor Department said Nov. 8. The lira weakened as much as 0.8 percent and two-year bond yields climbed 33 basis points on the same day.
“There is still panic because of the fear that the Fed may bring take tapering to an earlier date,” Ugur Kucuk, a fixed-income strategist at Is Securities Investment in Istanbul, wrote in e-mailed comments today. Selling will gain traction if Fed members imply “recovery in jobs” and gross domestic product “growth are satisfactory,” Kucuk said referring to the speeches by Lockhart and Kocherlakota.
The Treasury in Ankara will start this month’s scheduled borrowing with a sale of 12-month zero-coupon bonds. It seeks to raise 11.6 billion liras ($5.7 billion) this month, according to the borrowing plan published on Oct. 31.