Daily Market Monitor: We believe that the rouble is again strengthening and both the recent price decline and the “Vimpelcom story” are easing, creating a more positive environment

As negative sentiment dissipated on Tuesday, the rouble
bond market demonstrated positive dynamics on moderate
turnover. We believe that the rouble is again strengthening
and both the recent price decline and the “Vimpelcom story”
are easing, creating a more positive environment. We see the
potential for price increases as limited, however.

The Russian Eurobond market was relatively unchanged on
the day, demonstrating little reaction to the finance minister’s
announcement that early repayment of Paris Club debt could
start as soon as 1q2005. However, the US Federal Reserve
announced a rate increase of 25 bps to 2.25% in the late
evening (as was broadly anticipated), which had a positive
impact to the benchmarks – and which should translate into
Russian bonds on Wednesday.