Russian government notes and the ruble were little changed before the Treasury’s weekly bond auction, which officials have moved back an hour in a bid to lure international investors.
The yield on so called OFZs maturing in July 2022 fell one basis point to 6.64 percent by 12 p.m. in Moscow. The ruble was little changed against the Bank Rossii’s target dollar-euro basket at 34.76, 11 kopeks weaker than the level at which traders say the central bank may intervene to curb ruble strengthening.
The Finance Ministry is selling 27.3 billion rubles ($909 million) of bonds in auctions starting 12 p.m. and 2 p.m. local time. Moscow is four hours ahead of GMT. Euroclear Bank SA said on Jan. 28 it is “highly unlikely” to be ready to offer foreigners direct settlement at today’s bond sale.
“Foreign investors’ interest towards Russian debt has moderated recently as they haven’t gotten the direct access to the local market,” Aton Capital analyst Anna Bogdyukevich said in an e-mailed comment.
The Treasury will offer 20 billions rubles of OFZs maturing in January 2023 at 6.70 percent to 6.75 percent, according to guidance released yesterday. The ministry will also offer 7.3 billion rubles of debt due February 2019 at a 6.27 percent to 6.32 percent yield.
It’s “quite possible” that an auction may be held in January with direct debt settlement through Euroclear in place for the first time, Deputy Finance Minister Sergei Storchak said in an interview in Davos, Switzerland on Jan. 23.
“Overall, demand in the OFZ market was undermined by Euroclear’s comment that it is not ready to start operations in January, despite Sergey Storchak’s previous comments,” VTB Capital analysts Maxim Korovin and Anton Nikitin said in an e- mailed report. Demand is unlikely to be strong for the 10-year bond today, they said.
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