Global:
MS FAYRE puts the current fair value for 10-year Treasury bond yields at 3.3% – bang in line with actual yields. This suggests to us that bond markets are pricing in the sweet spot of exceptionally low yields and benign inflation from Fed Chairman Bernanke’s speech on Monday.

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Turkey:
We expect inflation to rise steadily until mid-2010 while economic recovery becomes more pronounced. These factors might be necessary to cause the CBT to stop easing, and we even expect a tightening of 150bp starting in 3Q10. The high debt rollover ratio next year leaves little room for fiscal error and limits growth prospects.

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