Morning Commentary: Turkey’s lira, bonds better early Tuesday; Turkish banks lag

By Rebecca Melvin

New York, Aug. 14 – Turkey’s currency recouped some losses and bonds improved on Tuesday, although Turkish bank credits still lagged, according to market sources.

The lira bounced about 5% to 6.53 to the U.S. dollar, which was an improvement from 6.9 late Monday and representing a pull back from as low as 7.24.

There were improvements in emerging markets debt overall as well, a London-based trader said. But Turkish banks were notably weak.

Turkiye Garanti Bankasi AS, Akbank Turk AS, Turkiye Is Bankasi and Export Credit Bank of Turkey are some of the credits that have seen the greatest selling, the trader said.

But on Tuesday, Akbank’s 7.2% notes due 2027 were slightly firmer, quoted at 58.60 bid, 60.10 offered, compared to 58 bid late Monday and down from 68.5 early Monday. The bonds gapped lower through last week after having traded at the end of July at about 85.

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