Russian Bonds Mixed on World Bank Report, Firm Oil Prices
The Russian bonds traded mixed on Thursday after World Bank cuts Russia growth forecasts and sees 1.9% GDP fall in 2016. The Brent crude oil, a global benchmark for Russia's main export, was lifted on hopes for an agreement among exporters to freeze output underpinned the market.
The benchmark 10-year bonds yield, which is inversely proportional to the price of bonds, rose 0.44 pct to 9.23 pct and 5-year bonds yield dipped 0.43 pct to 9.28 pct at 10:00 GMT.
Oil futures recovered from 1-month lows to end the previous session up after the Kuwaiti governor for the Organization of the Petroleum Exporting Countries (OPEC), Nawal Al-Fuzaia, said there were "positive indications an agreement will be reached" on output during a producer meeting scheduled for April 17 in Qatar.
The International benchmark Brent futures rose 0.25 pct to $39.95 and West Texas Intermediate (WTI) jumped 0.45 pct to $37.92 by 10:00 GMT.
On the other hand, Russia’s GDP dynamics (seasonally adjusted) was flat in February 2016, as compared to 0.1% contraction in January, according to the monthly monitoring published by the Economic Development Ministry.
In addition, the Bank of Russia’s unexpectedly hawkish turn at its last rate meeting and the slump in oil prices are casting a shadow on the Russia long-term debt. Morgan Stanley in its report said that if oil prices continue to weaken, the rate on 10-year notes will climb by 50 basis points.
The material has been provided by InstaForex Company - www.instaforex.com