The end of 2018 for financial markets is definitely not wondered. The traditional irritants, such as the slowdown of the Chinese economy, the trade war between China and the United States, the rise in interest rates in the United States, and of course Brexit, were also accompanied by an unexpected deterioration in economic data in Europe. In particular, the indices of economic expectations of businesses already correspond to levels not just of growth slowdown, but rather recessions. In addition, because of the conflict around the construction of the wall on the border with Mexico in the United States, the government’s work has not been funded since the end of December and many of its functions have been blocked. more than 800,000 employees of federal government agencies are not paid, which seems to be beginning to put pressure on economic expectations in the United States. Of course, the strengthening of the trade war between the United States and China is temporarily on pause, while negotiations are under way on a possible deal, but there is no more positive news on this front. This cocktail of negative factors turned out to be non-digestible for investors and the month closed with panic sales. Thus, the S & P 500 index fell by -9% over the month, providing the worst December for the American market since 1931. Against this background, the PFTS index declined for the month “only” by -3.6%.
It is worth noting the stability of the UAH in spite of seasonal trends. It seems that this is greatly helped by the inflow of currency from foreign investors buying UAH T-bills with relatively high interest rates. This is undoubtedly a positive trend, which strengthens our confidence in the future economic stability of Ukraine despite the external background, which is perhaps the worst in the last few years. If now, despite the colossal uncertainty around the elections, we see external interest in UAH assets, then when this uncertainty is removed, it is reasonable to expect a sharp increase in such interest, excluding, of course, the rise of anti-market populists. It is also worth adding that whoever comes to power in Ukraine - his or her space for maneuver will be limited on the one hand by the aggression of the Russian Federation, and on the other - by the need to finance the budget in the condition of closed capital markets for Ukraine. Those. We still consider further cooperation with international organizations, in particular with the IMF, inevitable, therefore, in almost any case, one should not expect dramatic changes in Ukrainian politics.
