Daily Market Monitor: We believe the risk of benchmarks resuming their decline is still real, so negative dynamics could continue for Russian Eurobonds as well

With few new ideas to spur it into action, the rouble bond
market saw little movement on Friday. Loaded portfolios all
around are preventing prices from reacting to the rich rouble
liquidity and the strengthening Russian currency.
We could, however, see new trading limits in December, a
traditionally hot month on the bond market, and a resumption
of positive price dynamics can be expected in the coming days.
The Russian Eurobond market demonstrated a decline on
Friday that was mainly a reaction to Thursday\'s global FX
market dynamics, which had not been entirely priced in due
to the Thanksgiving public holiday in the US. On the back of
benchmark UST’10 yield growth of 4 bps to 4.24% the Russian
sovereign spread gained 7 bps to reach 232bps while the most
liquid Russia’30 bond yield increased by 9 bps to 6.73%. We
believe the risk of benchmarks resuming their decline is still
real, so negative dynamics could continue for Russian
Eurobonds as well.