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Bonds Rally As US-Russia Tensions Ease, But Sanctions Tail Risks Remain

RUSSIA
  • Unsurprisingly, Local & USD rates bid across the curve at the open on signs of US-Russia de-escalation and dialogue and a partial unwind in the embedded geopolitical risk premium.
  • USD bonds move 3.2-9.1bp lower across the curve, bull flattening at the long end and outperforming locals.
  • Local bonds shift 3-5bp lower across the breadth of the curve.
  • Although dialogue is a positive development for RUB assets, it still doesn't mitigate the likelihood of reprisal for the SolarWinds hack and election meddling -which Biden swore a response to.
  • US has not said these measures (supposedly intended for this week or next) have been delayed or cancelled. Focus today on 2028 & 2031 OFZ auctions for renewed demand.
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

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