As expectations for a ceasefire grow... Ukrainian bond prices surge

After the announcement of a U.S.-Russia summit

2029 maturing government bonds jump 5.8%

Ukrainian government bonds soared after news broke about the upcoming U.S.-Russia summit. The hope that the war between Russia and Ukraine, which has lasted for over 3 years and 5 months, could come to an end appears to have led to increased investment in government bonds.

According to Bloomberg News on the 12th (local time), Ukraine’s dollar-denominated government bonds (maturing in 2029) rose about 5.89% from 62.9 cents on the 6th to 66.7 cents on the 11th. Expectations for a ceasefire agreement between Russia and Ukraine grew after former U.S. President Donald Trump said on the 6th that there was a high possibility of meeting with Russian President Vladimir Putin. The two leaders are scheduled to meet in Alaska on the 15th. Ukrainian government bonds have fluctuated according to the state of the war. On June 5, prices dropped to 57.7 cents, marking the lowest price so far this year. Back in May, the peace talks between Russia and Ukraine ended without results, and at that time the U.S. also appeared to be moving to reduce support for Ukraine.

Recently, ceasefire discussions have been gaining momentum. President Trump said at the White House on the 11th, "I plan to tell Putin, 'You have to end this war,'" adding, "I think we can have a constructive conversation." There is still a possibility that Volodymyr Zelenskyy, President of Ukraine, could join for a trilateral meeting. President Trump mentioned, "Next, it could be a meeting between Zelenskyy and Putin, or a meeting including myself, Zelenskyy, and Putin."

According to Reuters, the U.S. intends to draw up a ceasefire agreement based on an exchange of territories between the two countries. On this day, President Trump said, "For Kyiv and Moscow to both end the war, they will have to give up land." However, both Ukraine and the European Union (EU) are negative about territorial concessions. On the same day, Andriy Yermak, Chief of Staff to the President of Ukraine, stated on X (formerly Twitter) that "the unconditional ceasefire is a prerequisite for substantive negotiations." EU High Representative for Foreign Affairs and Security Policy Kaja Kallas also stated, "Until Russia agrees to a complete ceasefire, no concessions should be discussed," warning, "we are preparing the 19th package of sanctions against Russia." The German government has convened a video conference to discuss the Ukraine issue. The meeting, scheduled for the 13th, will be attended by leaders from France, the United Kingdom, Italy, Poland, and others.

Myung-Hyun Han, Reporter wise@hankyung.com