Spreads on Russian and Turkish foreign currency bonds relative to US Treasuries have moved in lockstep since October 2009. (See Chart 1.) The prospect that commodity prices (and especially oil prices) drop back again later in the year suggests that Russian bonds could underperform for a while. But beyond this, there are several reasons to think that the risk premium on Turkish bonds will be higher than Russia’s.
Subscriber content
Read this in full, free
Start a free trial and use one of your 10 free starter credits to unlock this piece.