Government Bonds Auctions and Global Market Dynamics: Weekly Market Overview (21–25 October)
?? Government bonds. The Ministry of Finance of Ukraine successfully increased borrowings to UAH 25.8 billion while maintaining stable maximum bond yields. The 1.5-year government bonds attracted UAH 22 billion in bids, with UAH 5 billion allocated within the set limit at the unchanged yield of 15.25%. Bonds with a 2.5-year maturity also generated over UAH 22 billion in demand, with a UAH 5 billion allocation. The average yield for this issuance decreased by 1 bp to 16.24%, while the maximum yield remained at 16.25%. The offering of one-year bonds was fully placed at UAH 5 billion with a stable average and maximum yields of 14.65%. Additionally, the 3-year government bonds (5 million units) maintained their key rates at 16.80%, meeting the entire demand of UAH 1.7 billion.
In the initial placement of USD 200 million of one-year government bonds, participants submitted applications for USD 243 million. The placement was supported within the established limit with an unchanged cut-off level of 4.62% and an increase in the weighted average interest rate to 4.61% (+1 bp).
??Foreign exchange market. The hryvnia weakened by 0.2% WoW, closing the week at USD/UAH 41.31. This movement occurred alongside a moderate increase in the National Bank of Ukraine ’s foreign exchange interventions, which rose by 5% WoW to USD 708 million. Between 21–24 October, the interbank market reached a 42% WoW increase in currency deficit for client operations to USD 254 million. While foreign currency supply from bank clients declined by 7% WoW to USD 874 million, demand remained stable at USD 128 million (+0.6% WoW).
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?? Global news. On the international front, leading stock indices experienced weekly declines amid investor uncertainty about the future course of the Federal Reserve’s policy and the outcomes of the U.S. elections.
During the week, U.S. government bonds faced another wave of sell-offs driven by expectations of a more conservative Fed policy, reflecting the strengthening U.S. economy and persistent inflationary risks.