Fixed Income. CIS Sovereign Pulse - April 17, 2018

CIS sovereigns have been lagging advancing EM peers, as global risk asset spreads have shrunk amid falling geopolitical tensions and easing worries over the US-China trade dispute. Russian sovereign Eurobonds have remained under heavy pressure, while the sovereigns of Belarus and Armenia, whose economies are highly exposed to Russia, have also underperformed.Sentiment toward Russia has shown signs of improvement today, as US officials have reportedly postponed imposing new sanctions. Yet geopolitical tensions remain heightened, so we see limited scope for a rally in Russian assets.Elsewhere, the region has seen several important developments since we last wrote. Protests continue in Yerevan as Serzh Sargsyan is set to be elected prime minister. Azerbaijan, which reported 1Q18 budget dynamics, showed a stronger fiscal position amid higher than expected oil prices. Reform momentum remains strong in Georgia, where the IMF has completed the second review of its program, according to Georgia's economy minister. Finally, today's Eurobond placement by NC KMG may impact trading in Kazakh sovereigns.