Fixed Income
Ukrainian sovereign and corporate bonds notably underperformed bullish global markets last week as the situation regarding the signing of an EU-Ukraine free trade agreement at the end of this month appeared to deteriorate. However, an encouraging development was the European Parliament’s decision to extend its monitoring mission to Ukraine in order to try to hammer out a last-minute compromise to free jailed opposition leader Yulia Tymoshenko. A breakthrough would allow the signing of the agreement, known as the AA/DCFTA, at a summit meeting in Lithuania set for Nov 28-29. Benchmark 10-year Eurobonds inched up 0.2% to 85.5/86.9 (9.9%%/9.7%), while medium term Ukraine-17s lost 1.0% to close at 87.4/89.4 (10.7%/10.0%) and Ukraine-16s slipped 1.7% to 88.0/89.5 (11.4%/10.9%), with both of the latter issues performing somewhat better in the second half of the week.
