Local sovereign debt: long end in favor
On Friday, the OFZ curve flattened with the long end gaining 0.5-1.0pps. In particular, RFLB 28 closed at a yield of 13.20%, while RFLB 23s ended at yields of 13.60-13.70%. Meanwhile, bonds on the belly declined 0.5-1.0pp, price wise. Subsequently, the OFZ curve moved down 20-30bp in the long end and widened 20-30bp in the belly. Overall, the whole curve is below the CBR's key rate, so we think local investors (namely, banks) are staying on the side lines here, while non-residents are playing the first hand.
Maxim Korovin, Tatiana Zueva
VTB Capital analyst
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