Morning Commentary: Ukraine renounces neutral status, sees some trading action; EM quiet

By Christine Van Dusen

Atlanta, Dec. 24 – Bonds from Ukraine saw some activity at mid-week as the sovereign renounced its neutral status in an effort to join NATO, a move that ramped up tensions with Russia, market sources said.

“Some small pre-holiday action did take place,” said Fyodor Bagnenko, a fixed income trader from Dragon Capital. “The sovereign had very wide bid-ask spreads with slightly heavier offers, but no trades, thus looking mostly unchanged.”

Russia’s defense minister denounced Ukraine’s decision, saying Russia could cut ties with NATO if Ukraine joins the alliance.

“Corporates saw some small buying,” Bagnenko said.

Overall, emerging markets assets put in a quiet morning on Wednesday ahead of the Christmas holiday.

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