17 May 2019 19:23

Eurobonds rise moderately over week on increased risk appetite

MOSCOW, May 17 (Interfax) - Russian Eurobonds posted moderate gains in the past week thanks to increased risk appetite among global investors.

U.S. Treasuries were also up, with sovereign spreads changing only insignificantly.

In the week as a whole, the benchmark Russia-30 bond rose 0.25% in price to 111.67%. Spread between these and three-year U.S. Treasuries narrowed 5 basis points to 146 bps.

The 2043 bond rose 0.64% in price, with yield down 5 bps to 4.845% per annum; the 2042 bond rose 0.27%- spread between these and UST with the same maturity widened 1 bp to 229 bps; the Eurobond maturing in 2047 rose 1.56% to 104.08%, with yield down 10 bps to 4.98%; the 2027 bond rose 0.66% to 100.91%, yielding 4.12%, down 9 bps; the 2026 bond rose 0.8%; the 2023 bond grew 0.55%, with spread narrowing 7 bps to 126 bps; and the 2020 bond did not change.

Russian Eurobonds may correct down slightly in the coming week amid a forecast worsening of the situation in global capital markets and potential growth of geopolitical risks, according to the Interfax Center of Economic Analysis. World markets could come under pressure from concerns about a global economic slowdown and persisting uncertainty over trade disputes between the United States and China. Sanctions will also remain a downside for Russian bonds and could move to the forefront.