Debt Markets Today - January 11, 2021

CIS EUROBOND MARKETQuotes on Russian sovereign Eurobonds fell considerably in the first week of 2021 amid thin liquidity and a sharp uptick in US Treasury yields (the 10y yield climbed more than 20 bps over the week). The losses amounted to 3-4 pp at the long end and 0.8-1.6 pp in the belly.GOVERNMENT DEBTActivity in the OFZ market was extremely subdued in the last week of December with many local investors already away for the New Year holiday, and prices barely budged. Despite a pickup in risk appetite across global markets and thin liquidity, the outflow of foreign investment intensified, which likely owed to the publication of data from the CBR showing that inflation expectations had risen 1.4 pp to 11.5% in December, the highest level since 1Q17. According to the National Settlement Depository, the net outflow of foreign investment from the OFZ market over December 28-January 8 amounted to R13.5 bln. The biggest outflows were R7.3 bln from the 4y OFZ 26227 (July 2024) and R2.6 bln from the 5y OFZ 26234 (July 2025).STORIES> Basic sector output down 2.3% y-o-y in November> Preliminary data shows consumer prices growing 4.9% in 2020> Inflation expectations in Russia move higher in December> CBR reports R150 bln rise in nonresident OFZ holdings in November> O1 Properties bondholders approve proposed restructuring terms> O1 Properties: Debt restructuring offer could be better