Debt Markets Today - August 23, 2018

CIS EUROBOND MARKETTrading in Russian sovereign Eurobonds began on a positive note yesterday, though the mood later soured and the early gains were pared back a bit. The Russia 42 finished among the leaders, adding 0.6 pp to close at 103.4% (YTM 5.4%, Z-spread 243 bps), while the Russia 43 advanced slightly less than 0.6 pp to end the day at 106.3% (YTM 5.4%, Z-spread 248 bps). GOVERNMENT DEBTYesterday morning saw a continuation of the positive momentum from Tuesday in the OFZ market, with yields dropping up to 5-6 bps. However, later in the session, after it was reported that Donald Trump's former attorney Michael Cohen had information that might be helpful in Special Prosecutor Robert Mueller's investigation into Russia's alleged interference in the 2016 US presidential election, the trend reversed. Yields on medium- and long-dated issues closed 1-3 bps higher, while shorter notes returned to previous levels. Volumes were not significantly higher than on Tuesday, totaling R16 bln. The 1y OFZ 26216 accounted for roughly R5 bln of this.STORIES> Russian weekly inflation accelerates to 0.1%> Chief Economist's View: Money supply drivers to change> Metalloinvest publishes 1H18 financial results> Ukraine adopts public debt management strategy for 2019-21> NC KazMunaiGas publishes 2Q18 IFRS accounts