October 24, 2019 / 8:17 AM / 20 days ago

Rouble firms, bond yields hit fresh 6-year low ahead of expected c.bank rate cut

MOSCOW, Oct 24 (Reuters) - The Russian rouble opened firmer on Thursday, awaiting news from today’s European Central Bank meeting and with one eye on Friday’s expected key rate cut by the Russian central bank.

At 0754 GMT, the rouble was 0.2% stronger against the dollar at 63.84 and flat against the euro, trading at 71.14.

Brent crude oil, a global benchmark for Russia’s main export, was down 0.4% at $60.9 a barrel.

The central bank has strongly signalled its intention to lower the key interest rate from 7%, with analysts at Sberbank, Russia’s largest lender, and Goldman Sachs among those forecasting a 50 basis point cut on Friday.

In the local market, the rouble should receive support from month-end tax payments that usually prompt export-focused companies to convert part of their foreign currency revenues to meet local liabilities.

Yields on Russia’s 10-year OFZ treasury bonds, which move inversely to their price, have been reaching new lows all week, briefly dropping to 6.44% on Thursday, the lowest since May 2013.

Russian stock indexes were up. The dollar-denominated RTS index was up 0.4% to 1,397.1 points. The rouble-based MOEX Russian index was 0.4% higher at 2,833.4 points.

Shares in TCS Group Holding PLC, owner of Tinkoff Bank, rose for the fifth consecutive session, gaining 1.9% on Thursday, ahead of the group’s listing of its Global Depositary Receipts on the Moscow Exchange on Oct. 28.

“This is very positive news for TCS Group, as its liquidity will improve and its investor base will expand,” Aton Research said in a note. “Local investors will welcome the opportunity to add this stock to their investment portfolios.”

Shares in state-owned VTB Bank, Russia’s second largest lender, underperformed, falling 0.5%, after CEO Andrei Kostin said the company may make some military-loan write-offs, which analysts at Aton Research said might undermine VTB’s dividend targets.

For Russian equities guide see

For Russian treasury bonds see

Reporting by Alexander Marrow; Editing by Catherine Evans

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