Fixed Income

November 18, 2019

Ukrainian sovereign Eurobonds ended lower last week despite a flow of positive macroeconomic news. The country’s GDP grew by a solid 4.2% YoY in 3Q19 according to UkrStat’s preliminary estimate, exceeding the consensus expectations of a 3.7% YoY rise. Although the industrial sector was quite weak in the period, the agro sector was booming, with this year’s grain harvest delivering a new all-time high of 71mn tonnes with the potential to reach 74mn tonnes by the end of the season. In other developments, the IMF mission arrived in Kyiv on Nov 14 for further talks regarding a new 3-year support program. Ukraine must satisfy the Fund on issues such as the central bank’s independence and the future of PrivatBank, the country’s largest financial institution, which was nationalized in 2016 and now is facing court battles with its ex-owners.