Russian Eurobonds gain in week as int'l market sentiment improves
MOSCOW. April 1 (Interfax) - Most Russian Eurobond issues gained in price in the past week as sentiment in the global markets improved.
Trading was thin on Monday due to the Easter holidays in Europe. Bond prices corrected down on Tuesday as the international markets and oil prices slipped, but appetite for risk rose on Wednesday after Federal Reserve head Janet Yellen boosted the markets by saying the regulator would not be rushing into any rate hikes, and Russian bond prices rose. They held steady on Thursday, despite the growth in international markets coming to an end, and had a quiet Friday, ignoring the day's U.S. jobs market data.
Russia's benchmark 2030 bond grew 0.07% in price to 122.24% in the week as a whole. Spread between these and five-year UST widened 35 basis points to 143 bps.
The 2043 bond rose 0.41% in the week. The 2042 bond was up 0.49: spread between these and UST with the same maturity widened 7 bps to 359 bps. The 2023 bond grew 0.29%, with spread widening 10 bps to 266 bps, and 2020 fell 0.03% and 2018 fell 0.22%.
Russian bond yields could edge up in the coming week after two months of decline as prices come under pressure from a possible drop in oil and deterioration in market sentiment, the Interfax Center for Economic Analysis said.
Although the Fed chief's words last week gave the market a boost, this was short lived as the latest U.S. jobs market data point to the likelihood of a rate hike after all, probably in June. The downturn in oil prices on April 1 could lessen support for the ruble, which might affect Eurobonds also, but experts are not expecting the situation to deteriorate sharply in the belief that the medium-term trend is still favorable for Russian debt.