Fixed Income

December 28, 2020

Ukrainian sovereign Eurobonds finally corrected last week after a stunning global rally in emerging market bonds that began in early November after Joseph Biden won the US presidential election. The new coronavirus variant in Britain became a signal for selloffs across financial markets, including EM bonds. The main worry is that the variant is significantly more transmissible than the original strain. In major macroeconomic statistics, there was a statement from UkrStat that the country’s GDP shrank by 3.5% YoY in 3Q20, but rebounding by 8.5% compared to 2Q, which was hit hard by the strict COVID lockdown of the spring. Actual economic indicators are mostly coming in better than projected.