Frontier Daily, 27 April: EM spreads widen as Iran tensions drive oil volatility

• Bolivia 2030s +0.5%; IMF optimism supports bonds, but fuel shortages and gold weakness pose risks

• Kenya IMF programme stalled; governance concerns delay funding amid rising fiscal and FX pressures

• Russia cuts rates to 14.5%; eighth consecutive easing move as it continues unwinding earlier aggressive tightening

  
  

EM eurobonds spreads widened by 3bps on Friday as the US-Iran standoff continued, with the DXY and global DM yields coming off only slightly after firming on higher oil prices last week. Brent crude oil prices reached as high as US$107.4 in Friday's session before reversing to close 5.7% lower at US$99.1/bbl. Meanwhile, Iran has warned that it will respond forcefully if the US continues its naval blockade of Iranian ports.

Europe, Middle East

• Lebanon’s 2035 eurobonds gained 0.9% on Friday. Israel and Hezbollah exchanged fresh strikes on Sunday in southern Lebanon, threatening a recently extended ceasefire, with both sides accusing each other of violations.

• Russia’s central bank cut its key interest rate by 50bps to 14.5%, marking its eighth consecutive reduction as it continues unwinding earlier aggressive tightening. Meanwhile, the US has decided to fully phase out sanctions waivers that previously allowed limited exports of Russian and Iranian oil, signalling a return to maximum economic pressure on both countries.