Turkish bond yields rose after debt auctions
(Updates prices) ISTANBUL, March 18 (Reuters) - Turkish bond yields rose on Monday after treasury debt auctions on Tuesday attracted lower-priced bids than expected. The Treasury tapped a five year fixed-coupon bond, maturing on Feb 14, 2018, at a yield of 6.54 percent in an auction, above a Reuters poll forecast of 6.45 percent. It also sold a seven-year floating rate note, maturing on March 11, 2020, at a price of 98.210 lira in a new issue, below a Reuters forecast of 98.550 lira. On Tuesday the treasury will issue a 10-year fixed-coupon bond and tap its two-year fixed-coupon bond. "Demand for the 7-year floating rate note was higher compared to the 5-year maturity fixed coupon note, as we expected. Average compound yield on 5-yr note realised 24 basis points higher compared to February's auction where yields came at 6.30 percent compound," said Is Investment strategists in a note. Uncertainties regarding the policy stances of the world's largest central banks raises demand for floating rate notes to help manage duration, analysts said. "Benchmark bond yields rose above 6 percent after auctions ... If there isn't demand for the new 10-year bond at tomorrow's auction, we may see a further increase in benchmark bond yields," said a bond trader at a bank. By 1559 GMT, the yield on the two-year benchmark bond was at 5.99 percent, rising from Friday's close of 5.95 percent. The auctions will enable the treasury to reach its borrowing target for March, analysts said. Turkish assets were also under pressure with emerging peers as a levy on bank deposits in Cyprus threatened to deepen the euro area's debt crisis. The lira stood at 1.8110 to the dollar, from 1.8064 late on Friday. Against its euro-dollar basket it firmed to 2.0789, from 2.0837. Istanbul's main share index rose 0.32 percent to 83,378.82 points, outperforming a fall of 1.17 percent in the global emerging markets index. (Writing by Seda Sezer; Editing by Ruth Pitchford)
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