Fixed Income
Ukrainian sovereign Eurobonds finished mixed last week amid a negative environment for global fixed income instruments after the Federal Reserve signaled that another interest rate hike is in the cards in the coming months. Analysts are estimating a 1-in-3 chance of a rate increase at the upcoming Fed meeting on Mar 14-15. In Ukrainian domestic developments, another ceasefire began in the Donbass as the third anniversary passed of the abdication of former President Yanukovich and the installation of the “EuroMaidan” government. However, there has been no sign of any kind of political solution to the conflict beyond the current stalemate. The longest outstanding sovereign issue, Ukraine-27s, declined by 0.9% to 93.6/94.4 (8.7%/8.6%) while the shortest bonds, Ukraine-19s, climbed 0.6% to 100.9/101.4 (7.4%/7.1%). The VRI derivatives (linked to Ukraine’s future GDP performance) rose 1.6% to close at 31.0/32.0 with the latest data for industrial output drawing an encouraging picture for
