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The Fed starts monetary tightening

  • Last Friday the Minfin placed two issues – OFZ-26234 and OFZ-26235 (with a date-to-maturity in 2031)
  • On a weekly basis trade volume of OFZ-FI grew by 50% compared to the previous week
  • On the primary debt market Restor and Aeroflot are preparing for placements in the beginning of this week

Ruble debt market

Last Friday the Minfin placed two issues – OFZ-26234 (with a date-to-maturity in 2025) and OFZ-26235 (with a date-to-maturity in 2031). In the first issue it has been offered the whole volume available for placement (app. RUB 40.2 bn), in the second – RUB 20 bn. The volume of demand during the first auction totaled RUB 51 bn, at that the Minfin placed RUB 31.5 bn with a cut-off price at 6.68%, with a 5 bp premium to the secondary market. The volume of demand for the second auction totaled RUB 82 bn, which allowed the Minfin to place the total volume. The cut-off price totaled 7.25%, which also reflects a 5 bp premium to the market.

On a weekly basis trade volume of OFZ-FI, included into the state bonds index RGBITR on the Moscow exchange, grew by 50% compared to the previous week, while the OFZ-curve shifted 14 bp upwards across its whole length with maximum rates in the middle of it (4-5 years). Long OFZ rates declared their peaks since the middle of April, closing to 7.3% per annum. In the end of last week the CBR head Elvira Nabiullina declared on unacceptability of inflationary spiral that fuels the market expectations on possible key interest rate increase by 25 bp and even by 50 bp. So far the majority of economists, out of 27 surveyed by Bloomberg, expect that the CBR will increase its key rate by 25 bp to 5.25%, however on the back of higher than expected inflation for May (which totaled 6%), there are growing chances for more aggressive tightening.

On the primary debt market Restor and Aeroflot are preparing for placements in the beginning of this week; among already placed issues it is worth noting 3-year issue of PCB (BB/Ba2/-) for RUB 15 bn at 7.6% per annum.


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The contents of this document have been prepared by Joint Stock Company “Alfa-Bank” ("Alfa Bank") as Investment Research within the meaning of Article 36 of Commission Delegated Regulation (EU) 2017/5...

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