In the financial markets, the regime of extremely low volatility continues. The S & P 500 index added 0.5% and is trading near historical highs. At the same time, tension is growing around North Korea, which experienced a ballistic missile, which is likely capable of delivering a nuclear charge to parts of the United States. And with all the aggressive rhetoric of Trump addressed to North Korea, one must admit that there is practically no realistic peaceful scenario to stop Pyongyang's nuclear program. In Ukraine, on the one hand, the next tranche of the IMF has been postponed for the autumn due to the government's unwillingness to carry out land market reform. But, on the other hand, economic recovery continues, as evidenced, for example, by sales of new cars, which grew by 35% since the beginning of the year, and in June by 45% compared to June last year. This is one of our favorite leading economic indicators, which speaks about the confidence of Ukrainian consumers in the future. There is some recovery on the Ukrainian stock exchange, the index of which increased by 4.3%. While metal prices are not very favorable for Ukraine, prices for some types of agricultural products have significantly increased: quotations for wheat, corn, soybean, etc., at annual peaks, which is likely to provide additional inflow of currency into the country at the end of the year.
Recently, a curious study was published by Goldman Sachs, whose analysts found 14 similar periods of low volatility similar to the current one, and almost all of them ended in economic or geopolitical shocks, in particular, recession or war. The average duration of periods of low volatility is two years (the current one is already a year), and, of course, it is almost impossible to predict such shocks beforehand. In addition, the bottom of the global financial crisis was 9 years ago and most countries are probably already in the late phase of the economic cycle and are vulnerable to shocks. At the same time, central banks continue to aggressively stimulate the economy, and if new shocks come in now, it may turn out that they already do not have the means to cope with them. It is curious that all these fears towards Ukraine do not apply. Our economy is only beginning to recover after the war, banks after a long-term crisis are only going to start lending again, therefore, Ukrainian assets will remain interesting even with the growth of volatility in the world.