EM currencies at one-week low as Treasury yields jump; Turkish stocks rebound
SPY•Emerging-market currencies fell 0.4% as the US 10-year Treasury yield rose to 5.34%, its highest since 2002, while emerging-market stocks gained 0.2%. Turkish stocks rebounded 1.2% after their steepest monthly loss since 2008 in September.
1. Currencies weaken
Emerging-market currencies slipped to a one-week low on Thursday as higher US Treasury yields lifted the dollar to a three-month high. The US 10-year Treasury yield reached 5.34%, its highest since 2002, while MSCI’s emerging-market currency index fell 0.43% and its stock index gained 0.17%.
2. Turkey rebounds
Turkish stocks rose 1.2% after recording their steepest monthly loss since 2008 in September, when a crisis in the investment fund industry hit the market. Turkey’s Capital Markets Board decided to make interim payments to investors in liquidated investment funds over their net investment amounts; the lira was little changed against the dollar.
3. Regional moves
South African manufacturing sentiment improved in September after three months of contraction, while the rand weakened 1% and stocks dipped 0.3%. Asian markets were mixed: South Korean and Taiwanese benchmarks rose 2% and 0.9%, respectively, after Micron forecast quarterly revenue above estimates; the Korean won and Indonesian rupiah fell 0.6% and 0.4%.
