Fixed Income
Ukraine’s Eurobonds were lower last week following the previous week’s widespread reports in the Western media that Russia is bolstering its military presence on the border with Ukraine. The ceasefire between Kyiv and the Russian-backed separatists in the Donbass has also been fraying, with international monitors recording dozens of shelling incidents every evening along the contact line. We presume that the Kremlin may be trying to ratchet up confrontation ahead of next month’s G20 summit in China, with the aim of provoking Kyiv into an aggressive response that would damage its position with Western allies. Similar moves were observed ahead of the November 2014 G20 summit in Australia. It is currently unclear whether any new peace talks might occur on the sidelines of the G20 meeting. Meanwhile, the tensions took a toll on the hryvnia cash rate, which wobbled for the first time in more than half a year. In the absence of an IMF backstop for Ukraine, the currency slid 5% against the do
