FX.co ★ Turkey 10-Year Bond Yield Rises Over 1%

The yield on Turkey's 10-year government bond surged by over 100 basis points to reach 27.6% on Wednesday, marking the highest level in almost three months. This shift reflects traders' retreat from Turkish assets amid escalating political instability. The political tension intensified following the detention of Istanbul's mayor, Ekrem Imamoglu, a prominent figure and key political rival to President Erdogan. Imamoglu faces charges of fraud and terrorism, coinciding with the annulment of his university diploma by authorities—a strategy that could prevent him from challenging Erdogan in future elections. Notably, Imamoglu was expected to be nominated as the presidential candidate for the Republican People’s Party, Turkey's main opposition, this coming Sunday. Earlier in the year, a more conventional monetary policy approach had bolstered the bond market, as a deceleration in inflation and the central bank's firm stance enticed foreign investors.