Fixed Income
Ukraine’s sovereign Eurobonds continue to slide last week as President Poroshenko failed to articulate a clear strategy for reducing military tensions in the east of the country, which have risen sharply since the Nov 2 Donbass separatist elections. There are growing fears of a return to all-out conflict in the region due to Poroshenko’s hard-line stance against the elections, and Ukraine’s currency was hit by panic selling over the week, falling further into all-time low territory. Another negative impulse for investors was the slow formation of the new government after the Oct 26 election. Although it is clear that Arseniy Yatseniuk will keep the prime minister’s post, wrangling is continuing over ministerial appointments, especially the powerful post of Interior Minister currently held by Yatseniuk’s ally Arseniy Avakov.
