October was definitely positive for global financial markets, the S&P 500 added 2.4% and closed at a historic high above 3,000. An important reason was the progress in US-China trade negotiations, which now want to phase the trade, in the first phase, China will increase purchases aggro raw materials from the United States, will increase the transparency of its financial market and facilitate access to American companies, and the United States will abolish some duties. Of course, this is not a long-term solution, but better than further escalation. Meanwhile, economic data published around the world continue to indicate a gradual cooling of the economy. The slowdown is certainly more pronounced in Europe, especially in production, but both China and the United States are afraid of a possible recession, because, for example, the US Federal Reserve lowered rates for the third time this year, which, together with trade optimism, raised the markets to new heights.

As we have repeatedly written, the Ukrainian economy has every chance of accelerating. The inflows of funds of non-residents to the UAH government bonds continue to push the hryvnia up, which, among other things, helps to reduce inflation, which over the past 9 months amounted to only 3.4%. The NBU has already lowered the discount rate this year from 18 to 15.5%, and this is probably not the end, which has led to a decrease in the profitability of government bonds and a gradual reduction in the cost of servicing the public debt. But at the same time, the issue of relations between the state and the former owner of Privatbank is more and more acute. So, according to a recent article in the Wall Street Journal, before the allocation of the next tranche, the IMF wants to see progress in the return of money withdrawn by owners from Ukrainian banks, which naturally directly contradicts the interests of the influential oligarch. In recent years, we regularly wrote that there is no alternative to the IMF program, and sooner or later the conditions of the fund will have to be met, but now the macro situation has improved, and perhaps you should not be so categorical already. Probably, Ukraine in the event of a negative development of events for Privatbank could tighten the belt a little and attract more expensive money on the capital market and refinance large-scale payments on debts to the IMF there, which are due in the next two years. However, this is a much less preferable scenario from the point of view of the economy, a bad signal to investors, and in this case there will probably be no talk of a significant acceleration of the economy. Nevertheless, while our basic and most probable scenario, as before, involves continued cooperation with the IMF, the lifting of the moratorium on the sale of land, accelerating the economy and, therefore, a favorable period for prices of Ukrainian assets.