Russia: a brief market watch

RUSSIA ECONOMICS - In Brief 03 Dec 2025 by Evgeny Gavrilenkov
The key event on the fixed income market was the placement of the debut OFZs nominated in CNY. Two tranches were issued with maturity in 2029 and 2033 totaling CNY20 bln. According to Minfin, the main purpose of this exercise was the refinancing of Russia-25 Sovereign Eurobonds, which matured on December 4. However, the amount of the placement of the new papers was significantly higher than the size of the redemption (EUR2.4 bln in equivalent versus EUR1.75 bln). We suppose that the government was trying to maximize the amount of the placement and in such a way to decrease the size of the remaining issuance of RUB papers, which can be considered as a positive factor for the market. Overall demand was strong, especially for bonds maturing in 2029. We expect Minfin to tap the market with similar papers in CNY next time in May 2026, when another issue of Sovereign Eurobonds will be redeemed. Both the equity and FX markets demonstrated cautious optimism amid intensification of negotiations between the US and Ukraine, and on a separate platform between the US and Russia. However, the overall reaction to geopolitical developments is much more moderate than it was previously. In general, investors remain skeptical about the timing of the resolution of the conflict and the bulk of them expect it to continue for at least several months. Apart from geopolitics, the market is waiting for hints from the CBR on future dynamics of the key rate. Currently, the baseline scenario assumes a 50 bps cut in December, but given poor economic performance, we don’t rule out that the regulator may make a more radical step and decrease it by 100 bps. Slowing inflation could be another trigger t...

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