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Russian Eurobond prices are rising

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Russian Eurobond prices are rising

Russian Eurobond prices are rising
July 07
14:00 2016

Quotations of most issues of Russian Eurobonds are showing growth on Thursday. They compensate the improvement of the situation at the global capital markets, accounting oil platforms, too. At the same time the US treasury bonds under the intensified demand for risky assets are slightly falling in price. And this, in its turn, leads to the narrowing of sovereign spreads against the underlying assets profitability.

To the end of the day the cost of Russian government Eurobonds, maturing in 2030, has jumped by 6 basis points against the closing on 6 July and became equal to 122.28% of the nominal value. This corresponds to the yield of 2.28% per annum (the fall by 1 point from the previous trading day). By the end of the day the price for the US four-year treasuries has fallen by 16 basis points against the results of 6 July and became equal to 102.91% of the nominal value (the profitability increased by 3 points – to 0.87% per annum). Accordingly, the spread between the profitability of Russia-30 and four-year treasuries has become by 4 points higher if compared to July 6, and was equal to 141 basis points. “The prices of most issues of Russian currency government securities are now showing moderate growth amid rising oil and total local sentiment improvement at the global markets. Herewith, the trading activity is generally low”, – Alexey Tverdohleb, the trader of the Eurobonds sector of the Zenit Bank told in the interview to “Interfax”. “Currently, the premium for the risk, which is in the price of our bonds, is very small. Now there are a lot of risks. They are the European and the US risks. Asia has its own risks, too. Everything looks like some kind of “powder keg”, which sooner or later must explode. Maybe it will not be an explosion on a global scale, but these risks are able to cause some pressure on the markets. Now the markets are at a very high price levels, but it is very difficult to say when the reversal will take place. Things are quiet now. But do not forget about the existing risks”, – noted Alexey Tverdohleb.

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