Ukraine: The Golden Goose Is Dead (Maybe)

Rumours are sweeping the market that Ukraine Rail has failed to restructure its debt on a bond owed to Barclays Bank.

This rumour is compounded by speculation that a second bond is near default - one that is underwritten by Ukraine's government and owed to Deutsche Bank.

That's got the currency markets spooked and we are back to a flight to safety, which sees the unpopular pound taking a spanking in the corner down to USD1.6475.

On a separate issue, to highlight just how badly the bottom has fallen out of the agricultural market in Ukraine, the production of tractors for agriculture and forestry purposes fell by 85.1% in January-October 2009 year-on-year, according to the State Statistics Committee.

The production of seeders shrank by 81.5% and the production of disk harrows fell by 85.7% during the same period, they add.