Ukraine's U.S. currency-denominated government bonds jumped to their highest level since February amid signs of progress in the peace settlement, Bloomberg reported. Bonds maturing in 2029 rose 3 cents on the dollar and are trading above 72 cents. Bonds maturing in 2035 and other near-term issues were also among the leaders of growth among emerging market debt instruments on Nov. 24.
Eastern European currencies also strengthened: Hungarian forint, Polish zloty and Czech krone added about 0.2% to the euro, the agency reports. Growth was shown by stock exchanges in Budapest and Prague.
At the same time, amid the discussion of the peace plan, the index of defense companies from Goldman Sachs Group lost about 24% relative to the October peak, Bloomberg noted. Shares of German arms manufacturer Rheinmetall AG fell by about 5% in the moment on November 24.
What it means for the investor
Investors are buying Ukrainian assets and those of neighboring countries at any hint of movement toward a settlement, Bloomberg noted. The interest is growing despite the fact that so far the US plan to end the war, which includes, for example, Ukraine's refusal to join NATO and territorial concessions, has been opposed by Kiev and Brussels.
Ukrainian and US negotiators prepared an "updated and refined basic document on peace" over the weekend, a senior adviser to President Vladimir Zelenskyy said. Kiev is seeking more favorable terms in a proposal backed by Donald Trump, the agency reported.
"We've seen this sort of thing many times before, but it seems the sanctions pressure is making Russia a little more interested in a peace deal than usual," ING Bank strategist Chris Turner wrote. - The prospects for a peace deal on Ukraine are starting to be reflected in currency dynamics."
Graham Benke, portfolio manager at Amati Global Investors, agrees that market attitudes have changed. "Some investors are increasingly convinced that the conflict will be resolved in the coming months following the Trump administration's actions," he wrote. However, he said, "the conflict itself and the change in the U.S. stance on NATO has led to a shift in the European approach to defense spending - and that trend will not change even if the conflict ends."
Last week, JPMorgan analyst David Perry opined that the sell-off in European defense stocks was "unwarranted and provides a compelling entry point into the sector."
This article was AI-translated and verified by a human editor
