In August, the main trends and stimuli in the markets were the same as in July. The news of the ongoing Brexit epic and the unfolding of the trade war between the US and China almost daily swing the markets in different directions. At the same time, economic expectations continue to decline gradually, but so far, in all major economies, the recession is not about slowing growth. But amid worsening economic expectations in the US and Europe, the decline in bond yields continues. The S&P 500 index lost 1.8% for the month, but is still close to historical highs. In Ukraine, meanwhile, for the first time in history, one political force gained a majority in parliament. The youngest cabinet in Europe has been appointed. Ambitious in terms of scale and timing of the list of reforms. All this cannot but delight investors. As a result, Ukrainian bonds rose substantially in August and outperformed most other markets in August, while the hryvnia on non-resident inflows into government bonds held around $ 25.
As we have repeatedly said, the Ukrainian economy now has every chance of accelerating. Moreover, the economy is already on a positive wave, and GDP growth in the second quarter exceeded 4%, and this is still without effect from the elections. The National Bank is gradually removing the currency restrictions introduced in 2014 and is gradually reducing the discount rate. According to rumors in the press, the discussed model of land reform is quite liberal and will allow foreigners to buy agricultural land, which will accurately provide an additional and significant inflow of investment. Of course, as always, risks of external shocks remain, such as, for example, a sharp fall in commodity prices due to the slowdown of the global economy, but nevertheless, we are now most optimistic about Ukraine's future in many years, and we also expect investors to grow in demand. Ukrainian assets, including shares in the stock market.
