Fixed Income
Ukrainian sovereign Eurobonds enjoyed a strong appreciation for the second week in a row, with the benchmark 10-year issue adding 1.5% ahead of the Independence Day holiday (Aug 24) to close at 101.0/101.6 (7.6%/7.5%). Ukrainian debt got a boost from a Goldman Sachs report predicting that the hryvnia will continue to strengthen through 2018. The devaluations of the hryvnia in the last four years were a serious impediment for business activity and for the country’s economy as a whole. The latest macroeconomic data said that Ukraine’s manufacturing sector output rose by 2.5% YoY in July. On the other hand, the backbone of the country’s economy - the steel sector - remained weak, with steel production contracting by 4.9% YoY in July due to Donbass separatist-related factors.
