The year in the financial markets started very well. Still functioning monetary incentives, together with the accelerating global economy, push the indices to new heights. So, the S & P 500 index added + 5.6%, and the UX index + 9.4%. The EU's economy has grown as fast as possible since 2007, China's growth accelerated to 6.9%, the rally continued in the markets of China, Japan, Brazil, etc. As for Ukraine, despite the negative news about a pause in cooperation with the IMF due to the conflict around the bill on anti-corruption court, it is worth noting the strengthening of the national currency. It seems that after the January increase in the Ukrainian accounting, the yield on OVGZ increased to 16%, which became attractive for non-residents, as a result, it bought a substantial part of several recent issues, having put currency into UAH and exchanging it for the hryvnia, which supported the course. Of course it pleases that, as a result of the NBU's desire to keep inflation, the hryvnia has found its support level, but the impact of high hryvnia interest rates on the economy is certainly negative.
After the extremely positive January in the markets at the time of writing this report, the most serious correction has raged in a few years, and it is clear that we can state the end of the period of low volatility. Investors fear that a global inflation increase will provoke a faster than expected curtailment of monetary stimulus and a sharp increase in interest rates. By the end of February, of course, it will be clearer, but so far we do not see the threat of further spread of panic. The stakes remain low, the companies' profits record high, the financial system in the developed countries is in good condition, therefore, the markets are likely to calm down soon, but the issue of the rate increase will worry investors more and more. Thus, the bonds of developing countries have already fallen in price, which once again underlines the critical importance of cooperation with the IMF for Ukraine, since without it, in the face of rising rates, the country simply will not be able to refinance its external debts. But, most likely, Ukraine will still fulfill the necessary minimum to continue this cooperation and the country is waiting for a further slow economic recovery, the main drivers of which will be domestic demand and investment, and the situation on foreign markets will play a much less important role.
