Fixed Income

October 02, 2017

Ukrainian sovereign Eurobonds retreated for the second week in a row, which we attribute to profit-taking after their impressive run of growth. In our view, there was no particular selling trigger, but general concerns about the insufficiently quick pace of reforms in the country could be one of the reasons. In a joint letter to the Ukrainian government, the World Bank and the IMF expressed fears about amendments made to the bill on the pension reform when it was prepared for the second reading in the Parliament. On the security front, Ukraine made negative global headlines after a huge arms depot storing missiles caught fire in Vinnytsia province, forcing large evacuations of the local population in what looked like a clear case of sabotage. Poroshenko administration officials were quick to blame Russia for the event, although analysts fingered incompetence in the Defense Ministry as playing a role.