Fears about contagion from Turkish turmoil may be overblown for bonds in Europe.
While a slide in the lira prompted traders to shun the debt of Europe’s periphery from Portugal to Greece amid concern that banks may be exposed to Turkish assets, strategists see any spillover as limited. Politics is keeping Italy’s bonds risky, yet broader European exposure is likely to be mitigated by currency hedging and the improved health of the region’s lenders, according to Morgan Stanley and Danske Bank A/S.
