Ukraine’s sovereign Eurobonds are a bargain despite risks
Ukraine’s sovereign Eurobond yields soared since mid-November when US sources first reported a build-up of Russian troops along its eastern border. We retain an overweight on Ukraine’s Eurobonds. We think markets are pricing in too high a risk of invasion and default.
What you will learn:
- We calculate that Ukraine’s benchmark bonds price in a 20% probability of default, but better outcomes for Ukraine are still on the table.
- We believe that Russia aims to capitalise on the inconsistencies in the current US and NATO position on Ukraine’s NATO membership.
- If a military operation takes place, it is more likely to be in a form of precision strikes on key Ukrainian military infrastructure.
Long run drivers of EM convergence | Beyond the Headlines
We see the current conjuncture as representing a sweet spot for emerging market assets as disinflation is secure, activity is turning up, valuations are generally attractive, and global financial conditions appear supportive. In this week’s Beyond the Headlines, join Gabriel Sterne, Head of Global Emerging Markets, highlight why long run views are particularly potent right now during the Inaugural Global Economic Outlook Conference in London.Find Out More
Names will never hurt me –EM monetary credibility remains intact
Emerging market (EM) central banks' credibility to restrain inflation over the medium-term horizon remains intact despite the tests it's been subjected to in an age of supply shocks and massive income disappointments – and despite name-calling by some banks' political masters.Find Out More