LONDON, Jan 26 (Reuters) - Ukraine and Russia's government bonds rallied on Wednesday as hopes built that four-way talks alongside French and German negotiators later would reduce the risk of a military conflict.
Political advisers from Russia, Ukraine, France and Germany were due to hold "Normandy format" talks in Paris. Andriy Yermak, the chief of staff to Ukraine's president, tweeted on his arrival in Paris that it was "a strong signal of readiness for a peaceful settlement".
Ukraine's government bonds, which have lost between 25% and 45% as tensions have escalated over the last 6 months, rose as much as 3.2 cents, Tradeweb prices showed. Russia's dollar-denominated bonds, which have also been impacted, climbed as much as 1.7 cents.
Western countries are concerned by a Russian military build-up on Ukraine's borders and have warned of severe economic consequences if it invades its neighbour. Russia denies it plans to invade Ukraine but is demanding legally binding security guarantees from the United States and transatlantic alliance NATO.
(Reporting by Marc Jones; Editing by Andrew Cawthorne)
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