After an extremely difficult May, in June the financial markets almost completely recovered. The S & P 500 index added 6.8% over the month and again is trading at historic highs. It is curious that traditionally defensive assets, such as bonds and gold, also significantly added to the price. Economic data still does not inspire much optimism. But when representatives of the three largest central banks (USA, Europe and China) speak in unison about new stimulation in response to a slowdown in the economy - of course, this significantly reduces the risks for investors. The G-20 summit did not bring special breakthroughs in the trade war between China and the United States, but at least the parties sat down again at the negotiating table. As for Ukraine, the main newsmaker was the constitutional court, which confirmed the constitutionality of early parliamentary elections, and they will be held in July. NBU, meanwhile, continues to keep the discount rate at a fairly high level, which attracts foreign investors to Ukrainian government bonds and substantially supports the hryvnia.
Despite the worries of many analysts about the slowdown of the global economy, the external background is still generally positive, there is no recession, credit rates are extremely low, and this, of course, helps Ukraine to survive the tense, in terms of debt service, the period 2019-2021. As we wrote earlier, we consider early parliamentary elections as a very positive factor for the economy. In our opinion, there is a significant pent-up demand for investments in Ukraine, both in the financial sector and in the real one, and early elections will remove political uncertainty earlier and lead to an increase in investment earlier. Assuming continued cooperation with the IMF after the parliamentary elections and the absence of new shocks, we expect Ukraine’s economy to accelerate in the second half of this year and next, as well as price increases for Ukrainian assets.
