Emerging Markets on the Rack as Turkey Shatters Confidence

  • Turkey cut deeper into junk as S&P sees recession next year
  • Morgan Stanley says it is too early to add back risk in EMs
Pedestrians pass a giant Turkish national flag hanging above a DenizBank AS bank branch in Istanbul, Turkey, on Tuesday, July 19, 2016.Photographer: Ismail Ferdous/Bloomberg
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Emerging-market assets may be headed for more tumult as the volatility that gripped nations from Turkey to South Africa and Russia shows few signs of ebbing.

A chaotic week for developing nations last week took both stocks and currencies near their lowest levels in more than a year. Despite a rebound in the middle of the week, the lira resumed a sell-off on Friday and traders will probably remain on edge as they wait to see whether the U.S. imposes more sanctions.