Fixed Income
Ukrainian sovereign Eurobonds ended last week notably lower after the resignation of Economics Minister Aivaras Abromavicius created a slew of native publicity and revealed growing dysfunction in the government. The resignation was seen as a signal that if political infighting is not resolved, it could lead to a snap parliamentary election, which might further impede the implementation of pro-European reforms. Meanwhile, Prime Minister Arseniy Yatseniuk said at a Cabinet meeting on Thursday that the government remains united and committed to overhauling the economy. The key question is whether the Prime Minister was convincing enough to persuade the IMF not to delay a USD 1.7bn loan tranche expected by the end of this month. Investors are becoming concerned that Ukraine’s slow pace of recovery could turn it back in recession. The country’s benchmark 10-year Eurobonds lost 3.8% over the week to close at 87.0/.88.0 (9.7%/9.6%), and the yield on the shortest outstanding bonds, Ukraine-19s
