Daily Market Monitor: The Russian Eurobond market demonstrated neutral dynamics on Tuesday

The rouble bond market saw mixed performance on Tuesday,
although we expect sentiment to improve in the coming days. An
upturn could appear as soon as Wednesday as uncertainty on the
exchange rate side reduces while rouble liquidity remains quite
favourable.
The successful auction of RTK-Leasing bonds on Tuesday, which were
placed at 9.93% to one-year put option confirms the investors’
appetite for rouble bonds. Demand at the auction ammounted to Rub
5.2 bln — more than double the supply (Rub 2.25 bln).

The Russian Eurobond market demonstrated neutral dynamics on
Tuesday, although uncertainty on the interest rate side sill remains
high. The EMBI+Rus spread climbed by 1 bp to 192bps. The
indicative Russia’30 bonds yield movement followed benchmarks (-9
bps), although the move was less pronounced (-1bps), amounting to
6.38% yield.
Benchmark dynamics remains the major factor of influence. U.S.
Treasuries were not significantly affected by weaker than expected
U.S. trade and budget balance figures. However U.S. consumer
confidence figures below previous levels reduced yields. We believe
this could lead to positive dynamics for Russian assets on Wednesday.
The main events for the day should be the following U.S. economic
releases: Mortgage applications and retail sales.