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Troublesome Trio in Emerging Markets Face Yield Spike Scare

  • Lira, real, rand brace for more volatility from U.S. yields
  • Emerging markets may remain under pressure: Standard Chartered
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Bond Route Eases After Yield Surge Triggers Market Havoc
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Eight years ago, when the taper tantrum roiled emerging markets, the so-called Fragile Five of Turkey, Brazil, South Africa, India and Indonesia suffered the most. Another spike in U.S. Treasury yields is threatening to wreak havoc on at least three of those nations.

The Turkish lira, Brazilian real and South African rand led major global declines last week in the worst developing-nation currency selloff since late September. Those exchange rates have the highest one-week implied volatility in the world, with some analysts warning of more pain ahead.