JPMorgan, Commerzbank Pondering Turkey Bond Yield Bottom

Banks from JPMorgan Chase & Co. to Morgan Stanley and Commerzbank AG are weighing the outlook for Turkey’s two-year note yield after it fell below 5 percent for the first time amid fading inflation concern.

Two-year yields will drop to 4 percent, according to Tatha Ghose at Commerzbank, Germany’s second-biggest lender. Morgan Stanley says the current low rate isn’t justified, while Turk Ekonomi Bankasi AS predicts yields won’t fall further. The yield sank to as low as 4.96 percent on May 3 before rising to 5.14 percent, trimming the drop in the past year to 419 basis points, the most among 17 emerging markets tracked by Bloomberg and more than twice the slide for Polish notes, the next largest decline.