Russia Bonds Fall 2nd Day on Gas Talks as Ruble Erases Decline

Russia’s bonds fell for a second day as the nation and Ukraine failed to reach an agreement on gas prices. The ruble posted a five-day gain after earlier declining as much as 0.2 percent versus the dollar.

The yield on ruble-denominated bonds due February 2027 advanced four basis points to 8.54 percent at 4:49 p.m. in London. The currency rose 0.2 percent to 39.8163 versus Bank Rossii’s target basket of dollars and euros by 6 p.m. in Moscow.

Russia and Ukraine were unable to agree on natural gas deliveries during overnight negotiations hosted by the European Union as OAO Gazprom insisted on receiving a debt payment before a deadline today. The ruble and bonds gained last week, and stocks entered a bull market, as the European Central Bank unveiled unprecedented stimulus measures to ward off deflation.

“Macro is still difficult, but it might be offset by carry advantages in the short and medium-term,” Luis Costa, a London-based strategist at Citigroup Inc., said by e-mail.

The ruble rose 0.3 percent against the euro to 46.5360 and appreciated less than 0.1 percent to 34.32 versus the dollar.

The Finance Ministry sold 7.5 billion of rubles ($218 million) of August 2023 bonds last week out of 10 billion rubles offered. Russian markets will be closed on June 12 and 13 for public holidays.

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