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Russian Bonds Retreat Before Long-Awaited U.S. Sanctions Report

  • Yield on Russian Eurobonds climbs to highest in two months
  • Report has been biggest headwind for country’s bond market
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Severstal's Mordashov on U.S. Sanctions, Trump, Putin

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Russian bonds slid, with some yields climbing to the highest in two months, and UBS Group AG recommended taking profit on the ruble before a U.S. Treasury report gauging the impact of possible sanctions on the nation’s sovereign debt.

The review due Monday has been the biggest headwind for investments in Russia’s $120 billion ruble debt market since it was reluctantly commissioned by Donald Trump in August as allegations of Kremlin election meddling swirled. While the report could serve as a basis for what M&G Ltd. has called the “nuclear option” for U.S.-Russia relations, most investors attracted by Russia’s outsized real rates don’t see debt sanctions as a base case scenario.