Yesterday, the Ministry of Finance conducted two auctions, placing RUB 7.6bn in total. The bid for RUONIA-linked RFLB25 was again below the offering size, printing RUB 4.2bn. Hence, MinFin allocated RUB 2.4bn, lowering the average price to 85.10, from 86.60 the week before. In the meantime, demand for RFLB20 6.40 was twice as great as the offer, but MinFin sold only RUB 5.3bn at an average yield of 13.77%, providing no premium to the secondary market.
In the morning, OFZ opened weaker amid a lacklustre oil performance and expectations of new supply. However, later the market recovered: at the end of the day, the belly closed 10-15bp lower in yield, while the long end declined 5bp. In particular, RFLB 28 (YTM 13.24%) closed up 0.2pp, price-wise, while RFLB 19 6.80 (YTM 13.4%) gained 0.5pp. Hence, the curve continued steepening, with the 5s10s spread up 5bp to -17bp.