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Daily Review

Foreign market

Investors remained optimistic at the global grounds on Wednesday. Treasuries continued growing gradually backed by the rising demand of risk: 10Y benchmark added 1 bps more up to YTM 2.72%. The sovereign liabilities of the EM segment closed the day with a decline in rates. The Russian segment was no exception following the general trend.

Market situation. Investors remained optimistic at the global grounds on Wednesday. Treasuries continued growing gradually backed by the rising demand of risk: 10Y benchmark added 1 bps more up to YTM 2.72%. The sovereign liabilities of the EM segment closed the day with a decline in rates. The Russian segment was no exception following the general trend. Yields of the OFZ lost 3-5 bps more alongside the curve. Thus, the longest note Russia 47 currently stay at 5.4% in terms of yield, which is in line with the levels of early August of 2018, when the sanctions rhetoric got extremely bad on Russia. As for the corporate issues, orders to buy prevailed yesterday. A strong upside indicated the GPB Perp adding nearly a digit (YTM 4.15%). Read more

 

Local market

Buyers drove the Russian domestic bonds market yesterday. This years first Finance Ministrys auctions on placing OFZ were successful. Trade activity was twice higher yesterday compared to the intraday average of the recent month.

Market situation. Buyers drove the Russian domestic bonds market yesterday. Average rate drop alongside the yields curve was within 8 bps. This year’s first Finance Ministry’s auctions on placing OFZ were successful at the back of the increased appetite to risk. The volume of notes placed has formed RUB 35.142 bn. The investors were offered to buy a mid-term series 26223 for RUB 15 bn at the first auction. At that, the volume of orders has exceeded RUB 31.7 bn, allowing to sell the full volume under a weighted average of 8.17%. The second auction offered a long OFZ with a fixed coupon of 26224 series. Given series was sold in the full volume under a weighted average of 8.32% annually. The third one was represented by an inflation linked OFZ 52002, which was sold for RUB 5.142 bn under 3.3% annually. The entire issue was placed and the total demand exceeded the offer volume by nearly 2.4x forming RUB 83.4 bn. Read more

Trade activity was twice higher yesterday compared to the intraday average of the recent month. Sum turnover formed approximately RUB 28 bn for the day, which was remarkably above the estimates of the previous trade session. The principal operations indicated the classic: OFZ of 26207 series (YTM 8.24%, -1 bps) and 26219 (YTM 8.25%, -1 bps). The floaters weight per unit formed about 5% of the total turnover. The OFZ 29011 (YTM 7.56%) and inflation linked OFZ 52002 (YTM 3.28%, -3 bps) were the top gainers by liquidity volume.

Forecast. The market opened with an insignificant quotes dip. Assuming we are to observe a calmer trade session today with sellers’ advance.

 

Author: Julianna Lukyanova

 

Money market

The trade opened successfully at the currency market on Wednesday and the national currency advanced by evening.

The trade opened successfully at the currency market on Wednesday. The domestic currency managed to keep its positions below 67 vs dollar and by the end of the first half of trade, ruble progressed towards 66.65, setting a new high of 2019. Within the later hours, the pair consolidated within a narrow range of RUB 66.65-66.80, however, by the end of the workday, ruble proceeded upwards and dollar appeared to be at RUB 66.4 after 6:00 pm MSK. The US currency was unconfident at the global grounds as well. By the end of the workday, USD index was slightly negative despite dollar adding almost 0.2% vs euro. The pressure on index was made by Canadian dollar and British pound, which still is not confused by the domestic political turmoil on Brexit much yet. Read more

However, the oil quotes provided principal support to the domestic currency as by noon the oil prices climbed above USD 61. Then, the prices rebounded, however, set the new intraday highs and strengthened towards USD 61.45.

 

Author: Julianna Lukyanova

 
 
 
 
 

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