Geneva stalemate isn’t an endgame
This week’s talks between Russia, on one side, and on the other the US, NATO and the Organisation of Security and Cooperation in Europe (OSCE), have not resulted in an agreement. Russia and Ukraine’s markets reacted nervously: RUB depreciated to 77 vs USD in yesterday’s trading and the Ukrainian hryvnia fell to nearly 28 vs USD from 27.5 early this week.What you will learn:
- Markets have probably overreacted to the apparent failure of the talks, although geopolitical risks in the region remain elevated.
- We see the diplomatic discussions continuing in the coming weeks. The big come-back of investors into Russian markets is probably a way off.
- But in the absence of further escalation, the rouble should return on a firming trend later in Q1 as it remains substantially undervalued.
Tags:
Related research
Post
Local rates and FX: Asian local currency sovereigns – not long now
The pieces are almost in place for a high conviction OW on Asian local currency debt, but not quite. Indeed, we maintain a cautious view on all EM local currency sovereign bonds, including Asia, given the relentless concern over the dollar and domestic inflationary pressures.
Find Out More
Post
Pre-emptive debt restructuring: a viable scenario for Africa?
The question of debt restructuring is becoming a more pressing one: in recent weeks, a number of African sovereigns have openly or discreetly mulled public debt reorganisation, called for debt relief, or suffered credit rating downgrades owing to rising default odds.
Find Out More