8 Dec 2017 20:02

Eurobonds fall after mid-week gains

MOSCOW. Dec 8 (Interfax) - Most Russian Eurobonds, which posted moderate gains on December 5-6, fell as the past week drew to a close.

US Treasuries were little changed, and sovereign spreads inched wider.

In the week as a whole the benchmark Russia-30 bond fell 0.73% in price to 115.59%. Spread between these and four-year UST widened 25 basis points to 126 basis points.

The 2043 bond fell 0.18% in price and the 2042 bond was down 0.16% - spread between these and UST with the same maturity widened 5 bps to 241 bps; the 2023 bond fell 0.16% also, with spread widening 5 bps to 107 bps; the 2026 bond rose 0.09%; and the 2020 fell 0.1%.

The new Eurobond maturing in 2047 fell 0.15% to 103.24%, with yield up 1 bp to 5.04%; and the new 2027 bond rose 0.2% to 102.72%, yielding 3.91%, down 2 bps.

The Russian Eurobond market could fall in the coming week on the back of the international capital markets, including oil, which are also expected to deteriorate, the Interfax Center for Economic Analysis said.

The international markets could worsen under pressure from growing expectations of another rate hike by the Federal Reserve in the coming week and possible growth in geopolitical tension in the Middle East. Also oil prices may correct down, affecting Russian Eurobonds, among other markets.