Fixed Income
Ukrainian sovereign Eurobonds finished lower last week as confidence took a hit from the first major escalation of the Donbass military situation in more than a year. Heavy artillery and rockets hit both separatist-controlled Donetsk and its suburb Avdyivka, which is on the Ukrainian side of the line and where a strategically important plant for the country’s steel sector is located. Some analysts said this escalation stems from Russia wanting to test the reaction of new US President Trump, while others suggested Kyiv may also have been behind the fighting in an effort to keep the conflict in the news. Meanwhile, Trump spoke by phone with President Poroshenko on Saturday (Feb 4) in a conversation that both sides described as positive in tone. A separate new problem in regard to the conflict zone emerged when Ukrainian militant groups, including MPs, conducted an unauthorized blockade of a railway line used for transporting cargo to and from the occupied territories. Ukraine’s governmen
