After several months of rising tensions in financial markets caused by investors' concerns about a possible slowdown in the global economy, markets finally got some relief. If six months ago, the markets were expecting 3-4 rate hikes in 2019, now Fed Chairman Powell is already showing a willingness not to raise rates at all. Such a sharp change in tone towards easing monetary policy returned to investors an appetite for risk, which provoked a rally in financial markets. Thus, the S & P 500 index grew by almost 8% over the month, and quotations in the debt markets also grew. In Ukraine, the creeping strengthening of the hryvnia continues despite pre-election uncertainty. The yields on government bonds of 18% with inflation of less than 10% are too attractive for foreigners, and it looks like their plant currency and its exchange for hryvnia for investments in government bonds clearly supports the exchange rate. Of course, the NBU discount rate could already be reduced, but the NBU will probably not do this for now to minimize possible exchange rate fluctuations around the elections.

In Ukraine, it is already clear that these will be the most difficult predictable elections in our history, if only because there are three leaders of the presidential race, including the showman Zelensky, who is now leading in opinion polls. This candidate is a mystery for the markets; he has very little substantively commented on economic issues, and who forms his economic program and what his views are - is not yet known. The victory of Tymoshenko will be perceived negatively by the markets due to a number of populistic statements, in particular, about the reduction of gas prices and the renegotiation of external debt restructuring. The victory of the current president will be perceived positively by the markets, as it will remove the uncertainty regarding the vector of the country's further movement and the implementation of, albeit slow, but still reforms, as well as continued cooperation with the IMF and other international partners. However, as we have repeatedly written, any candidate will be trapped in a fairly narrow field for maneuver under such circumstances as Russian aggression and the need to finance the budget deficit in de facto closed capital markets for the country, so we do not expect a catastrophe anyway, quite the contrary . If government bonds are of interest to foreigners before the elections at 18%, then probably after the elections, the yield will fall to 15% or lower. And when Ukraine passes the year 2019, which is quite tense from a financial and political point of view, the rates can go even lower and will already be compatible with the growth of bank lending and the acceleration of the economy.