Debt Markets Today - March 5, 2020

CIS EUROBOND MARKETRussian sovereign Eurobonds continued to charge ahead yesterday, with long-dated issues posting gains in excess of 2.5 pp. Traders were focused on the middle of the curve, where the gains averaged around 1.0 pp. GOVERNMENT DEBTYesterday morning, OFZs resumed their rally in the wake of the Fed's emergency rate cut on Tuesday. The gains intensified in the middle of the day, as the ruble was strengthening and local accounts were likely taking positions ahead of the opening in New York in anticipation of increased demand from nonresidents. Demand was further fueled after comments by CBR First Deputy Governor Ksenia Yudaeva, in particular that disinflation risks are outweighing inflation risks and that the coronavirus is likely to have a limited impact on the Russian economy. Nevertheless, the opening in New York coincided with a bout of ruble weakening, which pulled OFZ yields higher. They eventually closed 8-15 bps lower on the day. Given the increased volatility, volumes came in at R88 bln - the highest since April 2018.STORIES> Russian inflation likely eased to 2.3% y-o-y in February> Russia economic activity: Domestic demand providing support> OPEC+ meeting preview: Fighting a blaze> Rada approves new cabinet> Government reshuffle may be trigger for Ukrainian assets to appreciate> Eurotorg extends Eurobond purchases in the market