Draghi Betrayed by CPI as Rally Seen Short-Lived: Russia Credit
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The fastest inflation in 33 months is diminishing prospects for Russian interest-rate reductions, threatening to cut short a rally in Russian government bonds.
Securities known as OFZs surged since European Central Bank President Mario Draghi announced unprecedented euro-region stimulus on June 5, extending gains over the past month that were driven by easing tensions with Ukraine. While Bank Rossii raised interest rates by 200 basis points this year to shore up the ruble, above-target inflation is set to keep policy makers from cutting borrowing costs anytime soon, according to Alexander Losev of Sputnik Asset Management.