3 Aug 2018 19:45

Russian Eurobond prices end week lower on weakening demand for risk assets

MOSCOW. Aug 3 (Interfax) - Prices for the bulk of Russia's Eurobond issues ended the week lower due both to the threat of new U.S. sanctions against Russia and hawkish U.S. Federal Reserve monetary policy.

In the week as a whole the benchmark Russia-30 bond fell 0.22% in price to 111.13%. Spread between these and four-year US Treasuries widened 7 basis points to 133 bps.

The 2043 bond fell 0.51% in price with yield up 4 bps to 5.16 per annum and the 2042 bond was down 0.86% - spread between these and UST with the same maturity widened 6 bps to 219 bps; the 2026 bond fell 0.7%; the 2023 bond fell 0.44%, with spread widening 13 bps to 123 bps.

The new Eurobond maturing in 2047 fell 1.31% to 98.08%, with yield up 9 bps to 5.38%; and the new 2027 bond dropped 0.69% to 97.01%, yielding 4.67%, up 10 bps.

The Eurobond market is unlikely to demonstrate pronounced movement up or down in the week to come after the latest selloff, the Interfax Center for Economic Analysis said.

Demand for Eurobonds will likely remain low as the market awaits new information concerning the potential U.S. sanctions and given the low volumes during the peak holiday season.