Fixed Income
Ukraine’s sovereign Eurobonds rebounded last week, as investor worries over the Donbass conflict eased somewhat after Kyiv promised not to re-start offensive military operations to overturn the unsanctioned elections that took place on separatist-controlled territory on Nov 2. In domestic politics, all of the parties that passed the 5% threshold in the Oct 26 national election, except for the Party of Regions successor bloc, signed a coalition agreement, and the first session of the new Parliament was announced for Nov 27, leaving the formation of a new Cabinet as the next major development. In macroeconomics, the Finance Ministry forecasted a 4.5% GDP contraction in the country in 2015 and projected consumer inflation of 13.4% for the period; these figures are probably too optimistic, in our view.
