Debt Markets Today - July 8, 2021. Russian Inflation Slows Only Slightly in June

CIS EUROBOND MARKETYesterday, the US Treasury 10y yield hit its lowest mark since April, which provided a boost for Russian sovereign Eurobond quotes. The Russia 47 outperformed with a gain of 0.6 pp, followed by the Russia 35, which added 0.3 pp. Euro-denominated issues barely budged despite comments by Finance Minister Anton Siluanov, who said the sovereign might go to the euro market again this year with an offer of $1.5 bln equivalent.GOVERNMENT DEBTYesterday, the OFZ curve steepened for the second day in a row. We had previously pointed out that the short end of the curve had begun to see renewed inflow from foreigners (as shown by the weekly nonresident inflow figures). This trend seems to be continuing. Accordingly, short-dated yields moved 1-3 bps lower yesterday. Yields on long-dated OFZs, meanwhile, shifted 1-3 bps higher, which was likely attributable to the deterioration of the geopolitical backdrop, a weakening of the ruble and low demand at yesterday's OFZ auctions, at which long-dated paper was offered. On the other hand, the lack of a significant premium at the auctions probably helped to keep long-dated yields from correcting more sharply. Trading volumes in OFZs on the Moscow Exchange totaled R34 bln yesterday, which is about 60% above the daily average for the last month. Elsewhere in the EM space, meanwhile, yields on 10y government paper generally moved 1-4 bps lower on the day.STORIES> Headline inflation eases only slightly in June, weekly data shows uptick in early July> OFZ auction review: Tepid demand for long OFZs