The yield on the 10-year Russian OFZ extended its decline to the 8.7% mark, the lowest in six months, as a strong ruble and lower domestic consumer prices ramped up bets that the CBR could loosen monetary policy further. Weekly inflation data pointed to a third deflation reading on the week ending June 17th amid slowed consumer demand. At the same time, a plunge in imports and higher commodity prices lifted the ruble to 7-year highs despite the progressive relaxations of capital controls by the central bank. In its last meeting, the CBR cut its key rate by 150bps to bring it back to the pre-invasion level of 9.5%. While its impact in the OFZ market is limited, the Russian Ministry of Finance said it transferred RUB 8.5 billion in coupon payments on dollar denominated Eurobonds and that they are considered fully paid, risking a technical default on its sovereign debt.
Historically, the Russia Government Bond 10Y reached an all time high of 19.89 in March of 2022. Russia Government Bond 10Y - data, forecasts, historical chart - was last updated on June of 2022.
The Russia Government Bond 10Y is expected to trade at 9.15 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 9.88 in 12 months time.