Bonds Fall With Ruble as Sanctions Mulled: Russia Reality Check

Markets are reacting in real time to tension in Ukraine following Russia’s March incursion into Crimea and subsequent annexation of the Black Sea peninsula.

The Micex Index was little changed at 1,468.55 at the close in Moscow, giving an advance since Feb. 28, the day before President Vladimir Putin’s intervention, of 1.7 percent. The yield on local-currency bonds due February 2027, which has increased 128 basis points since the incursion, rose 11 basis points to 9.64 percent. The ruble weakened 0.6 percent to 37.3245 per dollar, bringing its retreat in the period to 3.9 percent.

The chart shows the performance of stocks, bonds and the ruble, along with indicators of Russian investment risk. The top panel displays the value of the Micex Index of 50 stocks, government debt in the Bloomberg Russia Local Sovereign Bond Index, and the ruble relative to the dollar.

Credit-default swap rates on Russian bonds due in five years appear in the bottom panel. The yield gap between Russian debt and U.S. Treasuries and the one-month implied volatility of the ruble are also tracked.

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