Debt Markets Today - June 21, 2021. Revising Targets for Successful Flattening Trade Ideas in Ruble Rates

CIS EUROBOND MARKETThe sharp decline in the US 10y yield boosted quotes for long-term Russian sovereign Eurobonds on Friday, with the gains led by the Russia 47 (up 0.8 pp) and Russia 43 and Russia 42 (each up 0.7 pp). Activity in other issues was muted, and price changes were minimal. Meanwhile, the euro-denominated issues added 0.2 pp, though on low volumes.GOVERNMENT DEBTThe OFZ curve continued to flatten on Friday, with an additional boost to that trend given by the continued flattening of the US Treasury curve (the 10y and 30y UST yields decreased by another 7-8 bps). In the case of the Treasury market, investors are expecting timely tightening of Fed policy to help contain the long-term inflation risks. Meanwhile, on Friday OFZ yields 2y and shorter were unchanged, while those in the belly and at the long end of the curve fell 4-8 bps amid a continued inflow of nonresident funds into the market. The 10y OFZ 26218 (September 2031) closed at 7.12%, the lowest level since early May, and OFZs outperformed other local EM debt. Turnover on the Moscow Exchange remained at a high R33.4 bln (80% above the average for the last month), with R25 bln changing hands in intermediate and long-dated issues.STORIES> Revising targets for our trade ideas in ruble rates