Fixed Income
Ukraine’s sovereign Eurobonds finished last week firmly higher, boosted by the smoother-than-expected nationalization of troubled PrivatBank, the country’s largest bank, and by adoption of the national budget for 2017 with a manageable deficit of 3% of GDP. The two events showed that the government remains on a course to meet the IMF’s requirements for the next USD 1bn loan disbursement, which could occur as soon as late January. Also, Western governments appeared to be toughening their stance on Russia’s military interference in Ukraine ahead of the Jan 20 transfer of power in the US to incoming President Trump, who is viewed as soft on the Kremlin. Both the US and the European Union took steps to keep their Russia sanctions in place last week, making it harder for Trump to quickly dismantle them.
