After the recent rise in geopolitical friction between Russia and Ukraine, JPMorgan Russian bonds moved from over-weight to market-weight.
The Bank decided to reduce its structural position even though the ensuing sell-off as the rigidities between the countries resulted in a drop in the value of local assets.
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JPMorgan’s Anezka Christovova, Saad Siqqiqui and Michael and Harrison in a report said, “While we still hold this base case, morphing risk recently suggest that the overhang could last longer than we originally expected, giving no clear window for structural repricing of local assets.”
The tensions have peaked as Russian troops at Ukraine’s border are present in a number greater than the last seven years. It was then, 2014 when it annexed crimea and backed separatist seizures, and the US is worried about the growing “Russian aggression”, as said by The White House on Thursay.