After the April closure of the S & P 500 at historic highs, investor sentiment changed dramatically. The first quarter was good, but as early as April - May, the global economy showed signs of weakening, and the escalation of the trade war between the US and China and the inclusion of the Chinese telecommunications giant Huawei on the sanctions list hit economic expectations to such an extent that all the major central banks are already discussing the need for further stimulation , and the S & P 500 fell by 6.6% over the month. In Ukraine, meanwhile, early parliamentary elections are scheduled (and are disputed in the Constitutional Court). But despite the rapid political struggle, everything is stable in the economy and financial sector. The new president has not said anything so far that would frighten investors, but he voiced support for integration with the West and cooperation with the IMF and ruled out the possibility of default, which positively affected Ukrainian eurobonds.
If a month ago, analysts' consensus was such that the trade war was too unprofitable and the United States and China would soon agree on a deal, now, at best, they expect the trade conflict to drag out, and at worst - the escalation of mutual restrictions in trade between the US and China will lead to a gradual separation of the economy of the planet into two areas, which will be accompanied by a reduction in trade and recession. In other words, the external economic background for Ukraine may well deteriorate. But, as we have repeatedly written, under the current IMF program, the Ukrainian economy is to some extent protected from external shocks. In our opinion, early elections would be preferable for the economy, since political uncertainty would have lasted less, moreover, there would have been a faster chance of receiving new tranches of the IMF, but let's see what the Constitutional Court will say to that. In any case, we believe that, after the parliamentary elections, the acceleration of economic growth is more likely than a slowdown, and that Ukrainian assets can give investors good earning opportunities in the coming years.
