Morning Note /

Alfa Morning Bulletin: 22 March 2022

  • OFZ trading resumes

  • Sanctions and hawkish Fed unsettle markets

  • OECD cuts forecast for global economic growth and expects a deep recession in Russia – NEGATIVE

22 March 2022
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OFZ trading resumes: Trading resumed in Russian government bonds (OFZs) yesterday although the stock market remains closed for a fourth week. Bonds at the short end of the curve closed with yields of 15-17% and those at the long end closed with yields of 14-15%. This morning prices are up and yields, particularly at the long end of the curve, are down 30-40 bp. Russia’s coupon payment on a sovereign bond maturing in 2029 was processed by correspondent bank JPMorgan, Reuters reported. That said, an $18.9 million coupon payment on a bond issued by Evraz has been blocked due to the Russian steelmaker’s ties to sanctioned billionaire Roman Abramovich. Russian blue chips such as Rosneft and Gazprom made bond payments last week without any difficulties. Crude prices surged yesterday, with Brent rallying 7.1% to $115.52/bbl, on supply concerns as EU mulls joining the US in an embargo on Russian oil imports.

Sanctions and hawkish Fed unsettle markets: A bond and equity selloff sent Wall Street tumbling lower on Monday night after the US Fed Chief said the monetary authorities are prepared to do what it takes to combat inflation and that bigger-than-usual rate hikes would be deployed if needed. A lack of progress in talks between Russia and Ukraine added to the negative sentiment among investors. This morning though Asian markets are advancing led by energy and mining stocks as investors braced for aggressive US rate hikes and Russia sanctions disrupting oil supplies. Oil prices have climbed 1.5% to a two-week high of $117.27 a barrel on news that some EU members were considering imposing sanctions on Russian oil and as attacks on Saudi oil facilities sent jitters through the market. A selloff in bonds had deepened this morning (10UST 2.3%) and US equity futures are wavering after Federal Reserve Chair Jerome Powell struck a more hawkish tone on the central bank’s campaign against high inflation.


OECD cuts forecast for global economic growth and expects a deep recession in Russia – NEGATIVE

VK and Sber continue strategic revision of jointly owned businesses, Local Kitchen up for sale