German Bank TL Bond Forecast

Deutsche Bank: TL-denominated bonds will be the best-performing bonds of 2024

According to analysts at Deutsche Bank, Turkish lira bonds will no longer be the worst-performing bonds among developing countries this year and will be the best in 2024.

“It is still a few months too early to be structurally bullish,” strategists led by Christian Wietoska said in a note. There will be an additional price range of 200 to 400 basis points for TL bonds. “From now on these bonds will offer value because of the structural perspective,” he said.


Inflationary pressure, higher issuance volumes and at least another 500 basis points of monetary tightening will lead to further bond weakness by the end of the year, Deutsche analysts said. Analysts have suggested buying the lira against the dollar as a “better trade” until the two-year bond yield reaches 40 percent and the 10-year bond yield reaches 35 percent. The bonds are currently trading at around 41 percent and 31 percent, respectively.

“High inflation means that continued nominal exchange rate depreciation is inevitable,” Deutsche Bank strategists said. However, we expect the path to be more gradual next year and beyond,” he wrote.

Source: Sozcu


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