FX, bonds and rates weekly

The ruble reverted to appreciation and ended the week near USD/RUB 57. Three factors will influence the ruble this week: the start of the tax period, the CBR meeting and anticipation before the government meeting to discuss the FX market. We expect the ruble to appreciate to USD/RUB 51-55. On global debt markets, demand for HY assets fell while that for defensive assets increased. Yields on USTs, German and UK bonds fell. The CBR key rate meeting on Friday will be the main event of the week for the Russian debt market. We expect the CBR to reduce the key rate by 75 bps. The slope of the OFZ curve increased, with yields at the short end falling, while those in the belly and at the long end advanced. The week of July 2-8 saw deflation in Russia.