Eurobonds recover losses as oil rebounds
MOSCOW. May 19 (Interfax) - Russian Eurobonds recovered earlier losses towards the end of the past week as oil prices rebounded and the political turmoil in the United States subsided.
Long 2042-2043 bonds even posted marked gains.
US Treasuries also rose moderately in the week, and sovereign spreads were little changed as a result.
In the week as a whole, Russia's benchmark 2030 bond rose 0.02% in price to 120.6%. Spread between these and four-year UST edged 1 basis point wider to 79 bps.
The 2043 bond rose 0.9%; the 2042 bond rose 1% - spread between these and UST with the same maturity widened 1 bp to 242 bps; the 2026 bond grew 0.13% in price; the 2023 bond was up 0.16%, with spread widening 3 bps to 156 bps; and 2020 and 2018 were unchanged.
The coming week is not expected to produce a clear trend on the Eurobond market due to conflicting signals from the world markets and in anticipation that the OPEC+ countries will extend their agreement to reduce oil production at their meeting on May 25, the Interfax Center for Economic Analysis said.
High oil prices on expectations the oil deal will be prolonged by another nine months and a stronger ruble as a result will buoy the bond market. However instability in the capital markets caused by the unfolding political crisis in the United States as well as expectations the U.S. Federal Reserve will hike interest rates again in June will also take the edge off any buying.
