In her testimony to the Congress Committee, Janet Yellen confirmed what markets have already been actively pricing in since the US election: 1) the FED is likely to raise rates "relatively soon,” i.e. December, 2) it will closely watch the new administration's economic policies, and might adjust its stance when there is greater clarity. UST yields moved 3-4 bpts higher, with the UST10 closing at 2.24%.
EM sovereigns opened vigorously but erased their gains and even printed minor losses after Yellen's speech. Russian sovereigns closed almost unchanged, while in corporates we saw supply in 1st tier bonds, and demand in higher yielding or shorter 2nd tiers.
OFZs closed tighter on modest volumes: 26207 8.71 (-9 bpts). Sistema placed RUB10bn of 3.25Y bond at 9.90 coupon (10.27YTP) . This was below the upper end of the yield guidance, which could indicate decent demand. Moscow region announced plans to sell a jumbo RUB25bn bond next week, 23 Nov.