CEMEA Rates Snapshot: Relief Rally Ensues as Risk Conditions Improve

Relief across the space as EM rates take a breather from broad-based risk-off that has kept rates on the back foot for most of the week. SA, Russia & Turkey all trading in the green, but Turkey underperforming slightly. EM FX also better bid vs a softer USD with RUB leading, while risk premia recede in all 3 countries.

• SA: SAGBs trade bull flatter on the day with 15-30Y yields holding -10-13bp lower. 10Y yields are slightly more hesitant at -3.9bp, struggling to gain traction below 9.80. ZAR also feeling some reprieve, having moved below 15.00 to the $, but will need to close below 14.80 to secure a trend break. 5Y CDS trades -8.6bp lower.
• RUSSIA: OFZs stand notably firmer today after a few successive days of acute weakness. Yields are -3-9bp lower across the curve with a bear flattening bias holding. Gains are concentrated in 7-15Y yields, while RUB has taken a leg firmer against the USD to target June 2020's lows. 5Y CDS trades 4.69bp lower.
• TURKEY: TurkGBs trade somewhat mixed with 2Y yields -11bp while the rest of the curve hovers -1bp below the open. USD bonds, however, are trading -8-10.6bp lower across the curve with a slight bull steepening bias. TRY is a lot more subdued vs its peers (0.00% on the day), following dovish comments from CBRT gov Kavcioglu. 5Y CDS trades 10.73bp lower.