I have an interview coming up for a sovereign + supranational + covered research internship. I've learned about corporate fixed income during a MSc Finance so I have my duration, YTM, convexity etc down ok. One thing I totally lack is macroecon, but I have not mentioned any macro skills on my CV so I'm hoping they assume I don't know macro already beyond kindergarten basics, and have got me in for other reasons. With that in mind, what are the main drivers of sovereign/supra credit risk? What should I absolutely know before going in?
I've found that political economy has become a bigger player with the eurozone crisis etc - with an undergrad in pol sci I could talk up those skills? How about the covered bond aspect, can govts nationalise covered assets etc?