Midday Commentary: Turkish bonds tighten after national election; Russian paper narrows

By Christine Van Dusen

Atlanta, March 31 - Bonds from Turkey were tighter on Monday morning as the sovereign's ruling Justice and Development Party (AKP) won the national election and awaited clarity on local election results.

"The market has reacted positively to the news," a London-based analyst said. "Prime minister Erdogan's speech, however, was somewhat aggressive toward his opponents, which will raise concerns that protests may return, especially on the YouTube and Twitter bans."

Erdogan, part of the AKP party, is now more likely to run as the country's first directly elected president, she said.

Looking to Russia, the country's ratings are under review by Moody's Investors Service.

"The move does not come as a surprise," the analyst said. "But we do note that Moody's now expects a contraction in the economy of 1% in fiscal 2014. Standard & Poor's and Fitch both still expect growth."

Still, Russian bonds managed to tighten on Monday morning, she said

"The market feels supported on the final day of the quarter," she said.

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