Fixed Income
Ukrainian sovereign Eurobonds ended somewhat lower last week, with few buyers appearing at the current record-high price levels amid uncertainty over US interest rates. It is widely expected that the Federal Reserve will lift its base interest rate by 0.25 percentage points when it meets this week. FedWatch, a software tool that estimates how markets think monetary policy will go, put the probability of a June rate hike at 91%; a quarter-point hike could be expected to push Ukrainian yields up by a similar increment. In Ukrainian political developments, Parliament passed a law outlining the country’s course towards NATO membership, but the event received scant attention from the alliance’s largest member countries. The country’s longest outstanding Eurobond issue, Ukraine-27s, inched down 0.1% to 97.3/97.9 (8.2%/8.1%), while Ukraine-19s (due in just over 26 months from now) declined by 0.2% to 102.7/103.4 (6.3%/6.1%) The so-called VRI derivatives (linked to Ukraine’s future GDP grow
