Government Bonds Auctions and Global Market Dynamics: Weekly Market Overview (15.04–19.04.2024)
?? Government Bonds. As a result of the auction, budget revenues amounted to UAH 6.9 billion, with stable maximum rates for domestic government bonds. Demand for annual bonds decreased to UAH 4.1 billion (-33%), with rates ranging from 15.90% to 16.10%. The available offer of UAH 3 billion was placed with maintaining the maximum yield at 16.10% and reducing the weighted average rate to 16.09% (-1 bps). Demand for two-year government bonds remained low, with an offer limit of UAH 3 billion. Participants submitted seven bids for approximately UAH 480 million, which were supported at unchanged base rates of 17%. Meanwhile, the volume of bids for three-year government bonds (3 million units) reached UAH 3.2 billion (+68%). The maximum and weighted average rates were set at 18.30%, increasing by 1 bps for non-competitive demand.
?? Foreign Exchange Market. On the interbank market, strong demand from bank clients contributed to the hryvnia's further depreciation to USD/UAH 39.79 (+1.0% WoW), while the National Bank of Ukraine 's interventions increased to USD 695 million (+84% WoW). During 15-18 April, the currency deficit for client operations increased to USD 237 million (+164 million WoW) amidst growing demand (+9% WoW) and lower sales (-8% WoW). The NBU conducted daily currency sales of around USD 120 million, increasing its presence to around USD 215 million by Friday to smooth imbalances.
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?? Global News. Over the week, US stock market sentiment deteriorated to lows since November 2023 under the influence of the Fed's prospects for maintaining high rates and the risks of further escalation in the Middle East. Reports from the US continued to show that the economy is resilient. March retail sales growth of 0.7% MoM was significantly higher than the 0.3% MoM forecast. At the same time, the estimate for February was revised upwards to 0.9% MoM (+0.3 pp). Weekly jobless claims also remained below market forecasts.
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