Daily Market Monitor: The rouble bond market is showing positive sentiment as no one wants to give up their long positions while others look to allocate their spear funds ahead of the May holidays

The rouble bond market is showing positive sentiment as no one wants
to give up their long positions while others look to allocate their spear
funds ahead of the May holidays. Rouble liquidity is at normal levels,
despite profit-tax payments due Thursday. We see the market as
remaining upbeat until the end of the week.
On Thursday, the main event on the local market was the placement
by auction of RUB 10 bln OBR-2. The issue assumes a put option for
September 15, 2005. On the back of positive market sentiment, this
placement combined with Thursday’s tax payments, may reduce rouble
liquidity, which is likely to support rouble rate on Thursday.
The Russian Eurobond market remained practically unchanged on
Tuesday. The sovereign spread contracted an insignificant 1 bps to
190 bps. The movement of the most liquid Russia’30 was the same as
the benchmarks (up 2 bps to 4.27%) and led to the rise of indicative
bonds yield to 6.24%. A slight downward correction on Tuesday’s
Eurobond market was caused by data releases on new home sales in
the United States, which surpassed expectations by 12%. On
Wednesday, we see a slippage in market activity due to the releases
of GDP, personal income and GDP deflators in U.S. scheduled for
Thursday.