Sanctions Fallout Seen Worsening as Russia Curve Invert

Bond investors are signaling the deepest concern for Russia’s economy in at least two years as the U.S. and European Union toughen sanctions because of the crisis with Ukraine.

Russia’s five-year ruble notes yielded more than 10-year debt this week for the first time since June 2012, data compiled by Bloomberg show. Government bonds headed for their worst monthly losses since May 2009, while the Finance Ministry scrapped its weekly debt auction yesterday, the first back-to-back cancellations since April.