Fixed Income
Ukrainian sovereigns lost substantial ground last week, giving up most of their gains from early September’s Donbass ceasefire expectations, as investors continued to fret over the geopolitical risks created by the apparent refusal of either side to back down in the ongoing Ukraine-Russia conflict, thereby putting the ceasefire on shaky ground. NATO says Russia still has about 1,000 heavily armed troops in east Ukraine, while another notable issue that remains unsolved is Russia’s natural gas supply to Ukraine; Gazprom is now attempting to limit gas flows to Poland and Slovakia in order to prevent reverse deliveries back into Ukraine. Deputy Prime Minister Volodymir Groysman estimated the country’s likely shortfall of natural gas at 5.0bn cubic meters for the upcoming winter season. The EU says it has invited Russia and Ukraine to hold new EU-brokered talks in Berlin on Sept 20 in a bid to end the dispute.
