Government Bonds Auctions and Global Market Dynamics: Weekly Market Overview (8-12 July 2024)

?? Government Bonds. As a result of the domestic government bonds auction, the budget received UAH 12.6 billion due to the initial offer of UAH 7.7 billion in foreign currency issues. One-year domestic government bonds (4 million units) attracted the largest demand in hryvnia at UAH 7.4 billion, with yields ranging from 14.65% to 14.74%. Therefore, the Ministry of Finance of Ukraine placed the available supply along with a decrease in the weighted average and marginal rates by 2 bp and 4 bp to 14.70%. The demand for two-year domestic government bonds (4 million) was met at UAH 0.6 billion, with key policy rates set at 15.40%. Four-year domestic government bonds (5 million units) were limited to UAH 142 million in bids, with competitive demand amounting to only UAH 17 million at rates ranging from 16.70-16.80%. As a result, the average weighted yield decreased to 16.73% (-7 bp), while the maximum issue rate remained unchanged at 16.80%. For one-year bonds in USD (200 thousand units), demand amounting to USD 186 million was supported at the average weighted and maximum rates of 4.66%.

?? Foreign exchange market. On the interbank market, the hryvnia weakened to USD/UAH 41.04 (+1.2% WoW) amid lower activity from the National Bank of Ukraine in currency interventions. Over the week, the total currency deficit decreased to USD 265 million (-40% WoW), with net purchases by bank clients amounting to USD 99 million (-60% WoW). At the same time, the regulator's weekly currency sales moderately decreased to USD 532 million (-16% WoW).

?? World news. Further deceleration of inflation in the US economy contributed to a broad recovery in investor sentiment. At the same time, the weekly growth of major American indices was restrained by sell-offs among the largest technology companies.

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