Debt Markets Today - May 12, 2021

CIS EUROBOND MARKETWith US Treasury yields rising, quotes on Russian sovereign Eurobonds were under pressure yesterday. Underperforming were the issues maturing in 2043 and 2047, which lost 0.6 pp, followed by the Russia 42, off 0.5 pp on the day; other changes across the curve were not significant.GOVERNMENT DEBTOFZ quotes mostly closed in the red yesterday amid anticipation over new supply at today's auctions. Long issues 10y or longer in added 5-6 bps amid continued offers from nonresidents; 5-10y OFZs, meanwhile, added 2-5 bps, while the short end finished unchanged, supported by local investors. However, trading activity was light, with turnover at only R15 bln, 60% of the historical average for the month. The largest turnover came in the 14y OFZ 26233 (July 2035) at R4 bln. Many comparable EM local issues also suffered losses, the 10y paper of several countries in Eastern Europe, along with Turkey, Brazil and Mexico, rising 2-12 bps in yield. Today, the Finance Ministry will offer the same combination of fixed-coupon issues as it did on April 28: the 10y OFZ 26235 (March 2031) and the 14y OFZ 26233 (July 2035). The volume on offer is R25 bln for the former and the residual R30.4 bln for the 14y paper (see the story below).STORIES> Today's OFZ auction to have the same offering as two weeks ago> TCS 1Q21 IFRS: Strong platform for the year