OFZ: no shocks at market reopening

Overview. On March 21, the OFZ market reopened after nearly a three-week break. At first Russia's government bonds traded in a discrete mode from 10:00 a.m.till 11:00 a.m.

Contrary to expectations, the trading resulted on a mildly positive note.Prices of the “classic” bonds fell in line with projections, returning to a balance in the wake of the recent changes in the monetary policy.The RGBI state bond price index hit the lowest since December 2014, falling to 98.21 pt.

Sales were low, with “bids” (purchase orders) dominating an order book, including, apparently, put by the Bank of Russia.As a result, the curve on the short end came very close to the key rate level, 19-20%, the belly segment reached 16-18%, and the yield on the longest securities – 14-15%.Later on, it turned out that these yields were the bottom of intraday trading, as securities pared some of the early losses in the main trading (RGBI climbed back to 102.45 bps), while OFZs with floating coupons even managed to appreciate.