Morning Commentary: Isbank bonds see some buyers; ruble begins to recover; volumes low

By Christine Van Dusen

Atlanta, Dec. 22 – Investors showed some interest in Turkey-based Turkiye Is Bankasi AS’ (Isbank) bonds on a quiet Monday morning for emerging markets assets as oil prices picked up and the embattled Russian ruble saw some gains.

“Isbank’s 2020s – we saw a few buyers of these around today,” a London-based trader said.

Emerging markets bonds continued to experience volatility during the early session, and only partly because of the pre-holiday lull in trading and liquidity.

“The Finance Ministry’s decision to keep ruble deposits away from banks this month, as well as the ministry’s decision to make available its $7 billion of FX reserves for market intervention, have clearly helped,” according to a report from Commerzbank Research.

Looking to Ukraine – which recently saw its rating cut to CCC- on risks of default – the European Union and United States instituted new sanctions on Crimea, which restricted investments there, a trader said.

The new sanctions were “perhaps surprising,” given that efforts are being made to set a cease-fire, Commerzbank said.

“However, this should probably be seen as part of week-long discussions and the desire to legislate before the political Christmas break, and thus relatively neutral,” the bank said.

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