The Russian bonds were trading mixed on Friday as investor’s book profit after relishing weekly surge in crude oil prices. The benchmark 10-year bonds yield, which is inversely proportional to the price of bonds, rose 0.11 pct to 9.180 pct and 2-year bonds yield dipped 0.11 pct to 9.460 pct by 1040 GMT.
Crude oil prices also lost ground Friday as traders took profit following the weekly surge after Crude oil prices jumped to 5-month high as Energy Information Administration's (EIA) showed that crude stock rose lower than the market expectation last week. The International benchmark Brent futures fell 0.20 pct to $44.44 and West Texas Intermediate (WTI) tumbled 0.05 pct to $43.16 by 1015 GMT.
The Russia's March unemployment rate rose to 6 pct, higher than the market expectation of 5.9 pct, from lower 5.8 pct in February. According to State Statistical data, Rosstat, nearly 4.6 million people were unemployed, as compared to 4.4 million in the previous month. Similarly, Russia’s retail sales declined 5.8 pct y/y, against market expectation of 5.5 pct y/y fall, from prior down 4.3 pct y/y, pressurising Central bank of Russia for further monetary easing.
On the other hand, the Central Bank of Russia first deputy Governor Ksenia Yudaeva said that Central bank of Russia (CBR) will bring down the inflation figure to its target of 4% in 2017 as its strict monetary policy has already reduced inflationary expectations.
In addition, the CBR is widely expected to keep the policy steady at its next board meeting on April 29 and start monetary easing later this year. Also, the Russia’s GDP dynamics (seasonally adjusted) was flat in February 2016, as compared to 0.1% contraction in January, according to the monthly monitoring published by the Economic Development Ministry.
“We expect GDP to decline by the end of the year by 1.3% with household consumption being the major drag.” said Nordea Bank in a report.
Lastly, if unemployment, inflation and GDP growth fail to improve over the coming months, easing will occur sooner rather than later, pushing bonds prices further up.
The material has been provided by InstaForex Company – www.instaforex.com