Russia Yields Tumble Most in Emerging Markets on Oil, Euroclear

Yields on Russia’s local-currency bonds fell the most among developing nations and the ruble strengthened versus the dollar as oil climbed and investors bet the government will ease access to the debt market this quarter.

The yield on Russia’s generic 10-year ruble-denominated notes tumbled 26 basis points, or 0.26 percentage point, to 6.58 percent, the lowest level since 2008, data compiled by Bloomberg show. The drop was almost 10 times their average 90-day move and the most of 21 emerging markets. The ruble added 0.6 percent to 30.1910 per dollar by 11:50 p.m. in Moscow, after yesterday’s 0.5 percent decline.

Oil, Russia’s biggest export earner, surged as much as 1.7 percent to $94.70 a barrel in New York after data showed China’s exports rose more than forecast in December, stoking confidence that global demand is stabilizing. Ruble bonds outperformed peers in Brazil, India and China last quarter after President Vladimir Putin signaled the domestic market will open in 2013 for direct settlement for foreigners via systems including Euroclear Bank SA and Clearstream International SA.

Bets the market will be opened up this quarter “are keeping it hot,” Dmitry Dudkin, head of fixed-income analysis at UralSib Financial Corp. in Moscow, said by phone. “Oil is climbing, which is helping the ruble strengthen.”

An index of five-year government yields dropped 18 basis points to 6.1558 percent, extended yesterday’s 21-basis point slide, the biggest one-day drop since Nov. 21. The extra yield investors demand to own Russia’s dollar bonds over U.S. Treasuries fell 1 basis point to 153 basis points, according to JPMorgan Chase & Co.’s EMBI Global Index.

Trading, Interventions

Russia’s currency slid 0.9 percent to 40.0200 per euro and weakened 0.2 percent to 34.6141 versus the central bank’s dollar-euro basket, which it uses to manage swings in the ruble that can limit exporter competitiveness.

While the ruble’s trading hours were extended to 11:50 p.m. Jan. 9, policy makers won’t buy and sell foreign currency to influence its movements beyond 7 p.m., according to an e-mailed statement from Bank Rossii yesterday.

The central bank said it bought 5.15 billion rubles ($170 million) of foreign currency for settlement Jan. 9, according to a statement today. The regulator didn’t intervene in the local market in December as it shifts to targeting inflation instead of the ruble exchange rate.

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