Letters from Kyiv
In a recent trip to Kyiv, Ukraine, PGIM Fixed Income's priorities were threefold: Confirm the political outlook given the country’s political outlook; Assess the status of Ukraine’s IMF program and macroeconomic policies; Evaluate the fallout, particularly for the National Bank of Ukraine, from the ruling that invalidated the nationalisation of PrivatBank, the country’s largest private bank. Our findings from the trip reinforced our positioning views on Ukraine’s hard currency sovereign debt.
The Fed Clears the Way for Cuts as the Market Seeks Even More
The dovish tilt to the Feds June meeting created more optionality for itself, clearing the way for possible rate cuts in the second half of 2019 if incoming data indicate that economic growth is at risk of downshifting and prospects for a pickup of inflation towards 2% are fading. PGIM Fixed Income’s base case now expects two rate cuts in the second half of 2019—more than what the median Fed projection has penciled in, but less than the three cuts the market has been pricing in.
An Overdue Recalibration of the Credit Ratings for Mexico and Pemex
PGIM Fixed Income discusses the dynamics that led our internal credit ratings on Mexico and Pemex below the average of the rating agencies, our outlook going forward, and how this view is expressed in our investment strategy.
Russia’s Path to Credit Strength Amid Biting Sanctions
Given the state of the Russian economy and the uncertainties that lie ahead, PGIM Fixed Income analyzes how Russia has coped with biting sanctions imposed by the United States and the European Union, what might lie ahead in the coming months and years, and how this might affect its strong credit profile going forward.