ISTANBUL: The Turkish lira was slightly weaker and bond yields were steady on Tuesday as investors geared up for data expected to show local inflation spiked last month due to higher global energy prices.
Shares were up, tracking Asian stock markets.
By 0753 GMT, the lira stood at 1.7925 against the dollar , slightly weaker than 1.7911 late on Monday. Against its euro-dollar basket it weakened to 2.0521 from 2.0517.
The yield on Turkey's two-year benchmark bond was at 7.59 percent, virtually unchanged from a previous close at 7.60 percent.
"We expect the low volume trade on the bond market will continue until inflation figures are released on Wednesday. The benchmark bond yield would trade between 7.55-7.70 percent today," Halk Invest said in a research note.
Inflation data for September will be released at 0700 GMT. Annual inflation in August stood at 8.88 percent, declining from above 11 percent in April. The central bank's inflation target is 5 percent for both 2012 and 2013.
Higher energy prices are also expected to push inflation up in October. Turkey's state energy company Botas raised natural gas prices for consumers on Monday by 9.8 percent. Energy watchdog EPDK said electricity prices would also rise, for industry by 4 percent and for households by 9.8 percent.
The inflation outlook was expected to make the central bank tread more cautiously in easing monetary policy, helping to support the lira.
"Prospects that the central bank will be more cautious when loosening its policy after energy price hikes are supporting the lira. We expect it to trade between 1.7850-1.7950 per dollar today," said Fatih Keresteci, strategist at HSBC.
Turkey's central bank cut its overnight lending rate by 150 basis points to 10 percent in September, the first cut in seven months, and hinted it could do more to support a slowing economy.
The main share index was 0.38 percent up at 67,006 points, slightly outperforming a rise of 0.08 percent in the MSCI emerging markets index.
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