Russian Bonds Suffer As Investor Exit Positions

Following the crash of Malaysia Airlines Flight MH17, believed to be downed by a surface-to-air missile, in territory controlled by pro-Russian separatists last week, both the U.S. and the EU are weighing sweeping new sanctions against Russia. The proposals include a potential ban on all Europeans purchasing any new debt or stock from the country’s largest banks, but not on Russian sovereign debt, according to a Financial Times report.

Some investors have already taken concerns over sanctions to heart. Nomura closed out its positions in the local bond market and Russian credit, with some losses expected, the bank said in a note earlier this week.

“We now expect the story to shift to sovereign risk from stagflation and disinflation as investors assess whether they should be invested in Russia at all,” Nomura said.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza