Debt Markets Today - June 20, 2019

CIS EUROBOND MARKETCorporate paper remained the focus in the Russian Eurobond market. In the Russian sovereign segment, the Russia 47 fared the best (+0.4 pp), closely followed by the Russia 35.GOVERNMENT DEBTOFZ yields declined again yesterday, supported by the success of the auction for the 20y OFZ 26230. The decline accelerated later after another flat weekly inflation reading and the Economics Ministry lowered its monthly inflation forecast for June to 0.0-0.1% (saying 0% inflation was completely reasonable) and its annual forecast to 4.6-4.7%. In addition, expectations of softer Fed rhetoric likely supported the market. On the day, yields closed 10-12 bps lower in the 7y+ segment, and the 2s10s spread fell 6 bps to 25 bps, its lowest point since February. Nonresidents have been active on the bid side recently, but yesterday local accounts were predominant.STORIES> Consumer prices in Russia flat for third week in a row> Federal Reserve Review: Door for a cut almost open> CBR releases banking sector data for May> Observations from our Petropavlovsk site visit> Petropavlovsk places 5y convertible, announces buyback of 2020 issue> Changes to corporate bond recommendations> Buy long Russian and Kazakh sovereigns amid softer ECB and Fed policy