Foreign countries and artificial intelligence could help the Ukrainian markets

Last week was a short week on the markets, with the US having another holiday on Monday, this time President's Day, which ended with moderate growth. The S&P 500 index added about 50 points and opened on Friday at 5087 points. The market has been pulled up by artificial intelligence, the hottest investment topic of the past year, the current year, and most likely the next few years. It's not for nothing that discussions on this topic were the main focus at Davos, causing immense excitement among financiers. No, Skynet has not yet seized power over the exchange. However, the tech company Nvidia, which was previously associated exclusively with video cards and took advantage of the cryptocurrency hype, is now back in the right place at the right time and is engaged in artificial intelligence - to the market's delight. This was enough to recoup the losses of the first days. This brought the US market to another historical high.

On the other side of the planet, the stock market also reached a historic high in Japan.

The previous peak was in 1989, when many speculators, especially in the cryptocurrency market, had not even been born yet. Against this backdrop, the dynamics of the Chinese stock market, which has finally finished celebrating the Chinese New Year and returned to suffering, looks even more telling. This week, the Party decided to limit short selling in the market, explaining, with all the communist feverishness, to the markets that they do not understand the depths and importance of the moment. They made large sales volumes impossible at the trading day's opening and closing. It's good that speculators are not being sent to re-education camps. Judging by the dynamics, they are not being sent yet. Beijing tried to use a carrot by lowering the rate on 5-year debts used as a mortgage benchmark, but they failed to impress investors. In the case of China, they can only be impressed if Emperor Xi runs naked through Beijing with a poster saying "I love America," then steps down and returns China to the path of returning to democracy, at least of the Chinese model.

Artificial intelligence also helped the Ukrainian Eurobonds segment, which grew slightly against the external positive background. Despite the continuing uncertainty over US support, Washington is so confused that it cannot untangle itself. As a result, government securities rose slightly. This contrasts with the corporate segment, where the market has finally realized that there will be no miracle and that the largest companies will not be allowed to withdraw money from Ukraine and pay their debts. To accept this fact, we needed a statement from the IMF. The IMF signed the Staff Level Agreement quietly and quickly, which means that Ukraine not only remains in the program but will receive the next tranche soon. The uncertainty about the US aid is not an obstacle here yet.

In the domestic market, the hryvnia received more freedom from the National Bank. The NBU has reduced the volume of interventions in the interbank market in the last few weeks. This is either because it is cautious about reserves, as they may be left without American aid, or because the NBU's magic formula, which no one outside the NBU has seen, says that this is what should be done. As a result, the hryvnia fell to its January lows, back to where it started 2024, frightening Ukrainian journalists again and forcing them to look for reasons for this movement. The driver of this process was the interbank market, which was only sometimes kept up by cash market speculators, leading to strange situations where there was virtually no difference between the official and gray markets. It was the envy of Argentina. Not to mention Venezuela and Lebanon. By the end of the week, the hryvnia strengthened slightly and started Friday at around 38.4 hryvnia to the dollar.

The bond market is quiet. The volume of domestic debt placement is not growing, yields remain at the same level, and the only record is set by the number of government bonds held by individuals, many of whom have finally overcome the phantom fears of the Soviet era, where communists always scared their citizens by selling them bonds. Now, Ukrainians own many more government bonds than non-residents. The Ministry of Finance wants to avoid raising interest rates to place more debt and give banks a carrot. It does not want to use a stick in the form of a call to state-owned banks with an offer that cannot be refused. The government does not see an acute shortage of funds for now. Moreover, the first large tranche of $4.5 billion from the EU and money from the IMF are expected in March.