Ukraine’s Eurobonds and the hryvnia capped a second week of declines as renewed fighting in the east between government forces and insurgents cast doubt on plans to declare a cease-fire.
As Ukraine repays its $1 billion dollar bond, sentiment for the nation’s notes is souring with the economy withering amid fighting between government forces and pro-Russia separatists.
As Petro Poroshenko faces off against former Prime Minister Yulia Tymoshenko in today’s Ukrainian elections, investors are preparing for several possible outcomes.
Investors in Ukraine bonds will have an idea in three days’ time whether the rally they have enjoyed this month is likely to be sustained.
Ukraine’s 2017 Eurobonds rose for a sixth day, sending yields to a five-week low, after state television in Moscow reported Russian troops were withdrawing from the border between the two nations.
Ivan Tchakarov, chief economist at Renaissance Capital in Moscow, comments on how U.S. debt talks may affect emerging markets. He spoke by telephone from the Russian capital today.
Ukraine is unlikely to get more money from the International Monetary Fund as part of a $15.6 billion bailout program before parliamentary elections next year, Renaissance Capital said.
"Equity markets, being very forward-looking, may be just pricing in the fact that we might be seeing the end of the most acute military stage of the fight in Ukraine."
- Ivan Tchakarov on Jul 07, 2014