Yields on ruble bonds fell for a second day on bets Russia’s government will open its domestic debt market to the world’s biggest bond settlement system and as signs of growth in the U.S. and China spurred appetite for riskier assets.
An index of five-year government yields fell by four basis points to 6.3585 percent by 12:48 p.m in Moscow. Russian 10-year yields fell three basis points to 6.8 percent. The ruble was little changed at 34.8188 against the central bank’s dollar-euro basket, which it targets to curb exchange-rate moves that can hurt exporters. The ruble has gained 0.2 percent against the basket this week.
There are no obstacles stopping Euroclear Bank SA from working in Russia and the country’s market watchdog will send it a written response to a clarification request today, the Federal Financial Markets Service said yesterday. China’s economic growth accelerated for the first time in two years, while U.S. housing starts beat economists’ estimates.
“Specific statements on Euroclear were made,” Vladimir Kolychev, Rosbank (ROSB)’s chief economist, said by phone today from Moscow. “Foreign investors expect to enter the country’s bond market.”
The ruble slid 0.2 percent to 30.2485 against the dollar and was little changed at 40.4020 versus the euro. Ruble futures showed the currency strengthening 0.2 percent to 30.533 per dollar.
The ruble climbed against the basket this week as the central bank curbed interventions after buying about 15.3 billion rubles ($506 million) of foreign currency at the start of the year to curb the ruble’s advance.
“High oil prices are supporting a strong ruble rate,” Kolychev said. The ruble may climb to 34.65 to the basket by the end of the first quarter, the level at which the central bank intervenes to weaken it, he said.
Crude slid 0.2 percent to $95.30 in New York, 19 cents off a four-month high. Oil and natural gas account for about 50 percent of Russia’s government revenue.
The extra yield investors demand to own Russia’s dollar bonds over U.S. Treasuries was unchanged at 158, according to JPMorgan Chase & Co. (JPM)’s EMBI Global Index.
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