Fixed Income
Ukrainian sovereigns, as well as those of other emerging market nations, were weighed down last week by U.S. treasuries, on which yields rose to a two-year high just below 3%, as global markets fretted that the Federal Reserve will start to withdraw support for the U.S. economy as soon as next month. However, Fed policymakers have repeatedly said that any sign of weakness could delay the timetable for slowing the bond purchases, suggesting that a pullback might come later rather than sooner. Ukraine’s 5-year credit default swap (CDS) rate rose by 25 bps to 865 bps over the week, while benchmark 10-year Eurobonds manage to add 0.5% to end at 86.5/87.2 (9.7%/9.6%) on Monday (Aug 26). Quotes for medium-term Ukraine-17s fell by 0.7% to 89.8/90.5 (9.8%/9.5%). Quasi-sovereign Naftogaz-14s due next September edged down 0.5% to 98.8/99.4 (10.7%/10.0%). Ukraine’s top corporate debt also came under pressure, with MHP-20s dropping by 1.2% to close at 89.8/91.1 (10.4%/10.1%), Metinvest-18s losin
