Morning Note /

Alfa Morning Bulletin: 21 March 2022

  • Russia holds key rate at 20%

  • Global rebound losing steam as risks mount

  • Moscow Exchange to open trading in OFZs (government bonds)

21 March 2022
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Russia holds key rate at 20%: Global equity markets advanced on Friday after traders cheered a Russian bond payment that averted a technical sovereign default on Russia 23 and 43. The Russian Finance Minister Anton Siluanov announced last Thursday that the ministry had executed a transaction to cover $117 million of coupon payments on the two dollar-denominated sovereign bonds that came due last week. The US Treasury Department unfroze funds from confiscated Russia reserves to cover the payments to bondholders. At Friday’s CBR meeting the key rate was held at 20%, with the big news being the reappointment of Elvira Nabiullina as Central Bank Governor. Wall Street's three major indexes closed higher, boosted by technology stocks, after talks between the US President Joe Biden and Chinese President Xi Jinping over the Ukraine crisis ended without surprises. The US dollar strengthened after Federal Reserve officials said the central bank may need to be more aggressive to deal with inflation. Brent crude futures settled up 1.2% at $107.93 a barrel, a day after surging nearly 9% in the biggest daily percentage gain since mid-2020 due a supply crunch and sanctions against Russia.

Moscow Exchange to open trading in OFZs (government bonds): The main focus for the markets this week are negotiations between Kyiv and Moscow, although there are few signs of meaningful progress A fifth set of sanctions are being prepared by Western countries. The Moscow Exchange will open trading in OFZs (government bonds) this morning, although the Russian equity market remains closed. The EU will consider this week whether to join a US embargo of Russian oil, according to Reuters. EU foreign ministers will meet today, while NATO, the G7 and additional allies are to hold a summit on Thursday, when US President Joe Biden visits Europe.


The CBR kept its key policy rate unchanged at 20% - NEUTRAL

President Putin nominated Elvira Nabiullina for the third term - POSITIVE