On Monday, the quotes of the majority of Russian Eurobonds are showing neutral dynamics in anticipation of the results of the September meeting of the US Federal Reserve. At the same time, US Treasury bonds (US Treasuries) also remained practically unchanged in price versus Friday, which ultimately led to the preservation of sovereign spreads to the yield of underlying assets at the closing level on September 11.
The price of Russian government Eurobonds maturing in 2030 by 18:10 Moscow time did not change per day, amounting to 114.5% of par, which corresponds to a yield of 1.92% per annum (a decrease of 0.5 basis points to the previous day).
The cost of American three-year US Treasuries by 18:10 Moscow time decreased by 1.5 basis points against Friday, amounting to 102.17% of the nominal (the yield increased by 1 point and amounted to 0.14% per annum). Thus, the spread between the yield on Russia-30 bonds and the 3-year US Treasury bonds narrowed by 1.5 basis points to 178 basis points.
Quotations of RF Eurobonds maturing in 2043 increased as compared to the previous trading day by only 3 basis points – up to 140.08% of par (the yield remained practically unchanged and amounted to 3.36% per annum), prices of Eurobonds maturing in 2042 increased by 6 basis points, to 135.07% of the nominal (the yield decreased by 0.3 points and amounted to 3.33% per annum). At the same time, securities maturing in 2026 decreased in price by 12 basis points – to 114.95% of par, which corresponds to a yield of 1.965% per annum (an increase of 2 points to the previous day), quotations of Russian Eurobonds maturing in 2023 – by 10 basis points, to 110.06% of the nominal (the profitability increased by 3 basis points and amounted to 1.44% per annum).
The new 30-year issue of sovereign Eurobonds of the Russian Federation with maturity in 2047 lost 11 basis points in price, having fallen in price to 133.75% of par (the yield increased by 0.5 points and amounted to 3.335% per annum), and the new 10-year issue with maturity in 2027 increased by 1.5 points, to 112.97% of par (the yield decreased by 0.5 points and amounted to 2.175% per annum).
“Today, the dynamics of Russian Eurobonds was generally neutral; market participants are waiting for important events this week, among which the next meeting of the US Federal Reserve can be distinguished. In the absence of new stimulus measures from the US government due to disagreements between Democrats and Republicans in Congress, on the actions of the US Central Bank are coming to the fore. Accordingly, the dynamics of both US Treasuries and practically all risky assets will largely depend on the FRS rhetoric. So far, the situation in the sector of domestic Eurobonds is relatively calm, despite the existing points of tension. Traditionally, September for world markets is not the easiest period, since in the USA this is the last month of the financial year, and there are often very serious “shakeups” of investment portfolios by various funds. Therefore, in the coming weeks the situation on the markets may turn out to be quite volatile, “a trader from Roseximbank commented to Interfax Ruslan Pshonkovsky.