Fixed Income
Ukrainian sovereign Eurobonds ended lower during a tense political week for the country, as President Yanukovich fueled large pro-European street protests by refusing to sign a free trade agreement (AA/DCFTA) with the European Union at a summit in Lithuania. Although this outcome had been telegraphed by the President well ahead of time, investors are now worried about whether the Ukrainian government will be able to cope with the harsh political consequences arising from its inconsistent position on European integration. Moreover, it is still unclear what financial support the government might receive from Russia in return for not signing the AA/DCFTA, with concerns that Ukraine may be setting itself up for a stalemate between Moscow and Brussels. Benchmark 10-year sovereigns declined by 0.8% to end at 86.0/87.4 (9.8%/9.6%).
