UAH's TWI down

Макроэкономика 02.02.2015 Although Ukraine's 4Q GDP was supposed to be announced on Friday, officials in a last minute decision postponed the publication, most likely for two reasons: (1) statisticians could not accurately report data from the territory under the control of the pro-Kremlin militants; and (2) Ukraine has just begun debt restructuring negotiations with external private creditors. As the Russian government one year ago issued a US$3bn Eurobond with a punitive covenant on a public debt to GDP ratio of 60%, a reported breach could cause significant problems, possibly negatively affecting a favorable debt restructuring. Russia's potential reaction is the great unknown. The USD was flat following preliminary data of weaker-than-expected 4Q real GDP at 2.6% versus market consensus of 3.0%. The dollar index added mere 0.02%, while the euro declined 0.26%. Brent crude oil recovered to US$50.77/bbl, up 8.37%. Although the Russian ruble declined through most of the trading session, it recovered just marginally at the end of the session based on the US macro news. The ruble closed down 0.72% on Friday, and the hryvnia's trade-weighted value fell 1.39% because its nominal FX rate dropped by 1.81%.