Reuters/London


Belarus sovereign bonds fell up to 27 cents in the dollar yesterday on fears of debt restructuring, while broader emerging markets also weakened following a US Fed statement that boosted the dollar.
Belarus yield spreads over Treasuries widened 900 basis points to 1463 bps and its 2015 and 2018 bonds were sold off after President Alexander Lukashenko said the country may have to consider restructuring.
Analysts said the comments appeared aimed at pressuring Russia, to which Belarus owes the most money, with Lukashenko also threatening to pull out of a customs union with Moscow, a pet project of Russian President Vladimir Putin.  Russian spreads were at 686 bps, near last month’s record highs as the West considered another round of sanctions that would further restrict Russian companies’ access to foreign capital and could push some into default.
The rouble fell 1.3% against the dollar, hit also by oil prices near six-year lows.
Neil Shearing, head of emerging markets at Capital Economics also cited an escalation of violence in eastern Ukraine. “Also, the government has unveiled an anti-crisis plan yesterday, which is heavy on policy, but light on actual detail, in particular some of the numbers. There is a sense there are growing question marks over the government’s response to the crisis,” Shearing added.
Russian dollar-denominated shares fell 1%  Oil-reliant Nigeria saw its naira currency touch a new intra-day record low of 194.25 per dollar Emerging markets broadly weakened, with stocks down 1% and most currencies falling after the US Federal Reserve’s post-meeting statement indicated it was on track to raise interest rates this year.  The Malaysian ringgit fell to new six-year lows and the won hit four-month lows, the latter also hurt by policy easing expectations after Singapore’s shock rate cut.
South Africa’s rand eased 0.15% before a central bank meeting that may signal dovishness. Bonds hovered above the 7% mark that has not been breached since mid-2013. Turkey’s lira fell 0.7% on speculation of an emergency rate cut but ten-year bonds fell marginally  “The market is clearly not ready to buy lower lira rates,” online broker Swissquote said. “As lira denominated bond yields are already below the inflation breakeven, even a full percentage point drop in (inflation) is not enough to cover the inflation and the risk premium.”