Debt Markets Today - March 2, 2021

CIS EUROBOND MARKETYesterday, Russian sovereign Eurobonds reacted, with a slight delay, to the sharp decline in US Treasury yields on Friday and their subsequent stabilization. The Russia 47 and 43 led the way with gains of 1.5 pp and 1.4 pp.GOVERNMENT DEBTOFZ yields eased 4-5 bps at the long end and 2-3 bps in the belly yesterday against the backdrop of stabilizing US Treasury yields and the strengthening ruble. Turnover was extremely low at R10 bln. We think yesterday's positive movement will prove temporary. The OFZ market's main focus has shifted to the Finance Ministry's strategy. Given that dollar rates are highly volatile, we do not expect significant demand at tomorrow's OFZ auctions, despite talk from local banks that current levels are attractive, since these statements were made before the change in the global market situation. At tomorrow's auctions, we expect the ministry to again offer nominal issues in different parts of the curve (the 5y OFZ 26234, July 2025; and the 10y OFZ 26235, March 2031). A weak outcome to the auctions would likely again cause secondary quotes to retreat.STORIES> Media: US to announce new sanctions as soon as today> OFZ Weekly Flows: Nonresidents continue to decrease holdings> Gazprom sees export growth slow in February> Ukrainian inflation climbs to 6.1% y-o-y in January> Economic activity in Kazakhstan worsens in January> Belarusian inflation climbs to 7.7% y-o-y in January