Ukraine’s dollar bonds surged following the US midterm elections, with investors betting that a Democratic landslide will strengthen Kyiv’s defense efforts and improve relations with Washington. Ukraine’s 4.5% notes due in 2034 rose above 63 cents, the highest in over a month, as the market reacted to the Republican party’s heavy losses. President Volodymyr Zelenskyy has had a tense relationship with Donald Trump, who previously blamed Kyiv’s attacks on Russian refineries for high oil prices.
With Democrats now controlling both houses of Congress, analysts expect continued US intelligence and weapons support, including access to the Starshield system. Viktor Szabo of Aberdeen Investments noted the market hopes the new Congress will prevent disruptions to intelligence sharing. Peace talks may also gain momentum, with US negotiators set to meet European and Ukrainian officials in Brussels ahead of talks in Abu Dhabi.
However, it remains uncertain how Trump’s stance on the conflict will evolve. Neil Shearing of Capital Economics warned Trump might push for a swift peace deal favoring Moscow, potentially increasing pressure on Europe to boost defense spending.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing