Fixed Income

June 24, 2019
 

Quotes for most Ukrainian sovereign Eurobonds rose notably again last week as both external and internal news flow provided positive signals. Traders are pricing in a nearly-certain interest rate cut at the US Federal Reserve’s July meeting, pushing global bond yields lower. Meanwhile in Ukrainian developments, new President Volodymir Zelenskiy met with business community leaders and promised to create a positive international image of Ukraine, emphasizing that he wants to improve the country’s place in the often-cited Doing Business rating. The country’s longest outstanding Eurobonds with maturity in 2032 jumped 3.3% to 94.6/95.3 (8.1%/8.0%) and the VRI derivatives (linked to Ukraine’s future GDP growth with expiration in 2040) advanced by 5.2% to 70.0/71.0 cents on the dollar after UkrStat improved its assessment of economic growth from 2.2% to 2.5% for 1Q19. Meanwhile, short-term Ukraine-20s corrected by 1.8% to 100.0/100.7 (7.8%/7.2%).