FirstFT: Ukraine’s government bonds surge as reserves reach record high

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Ukraine’s government bonds have surged in price over the past two months as investors grow more optimistic about how much of their money they will get back in an eventual restructuring of the war-torn country’s debt.

Kyiv’s debt tumbled following Russia’s invasion in February 2022, and prices sank further still after overseas creditors voted in favour of freezing interest payments on the country’s $20bn of international bonds.

But prices have climbed by more than 50 per cent since early June, putting Ukrainian bonds among the best performers in global fixed income markets this year.

A steady flow of foreign aid has pushed up Kyiv’s currency reserves to an all-time high of $41.7bn, according to central bank data published this week, while forecasts for the country’s economy have recently become less bleak. Read the full story.

Here’s what else I’m keeping tabs on today and over the weekend:

• Economic data: Russia and the UK publish preliminary gross domestic product figures today, and France has its consumer price index for last month and labour data. The International Energy Agency releases its monthly oil market report.

• UK strikes: A four-day walkout by junior doctors starting today is set to add to cancellations and a rapidly growing backlog for procedures at the NHS.

• Football: The Premier League gets under way with a match between last season’s champions Manchester City and newly promoted Burnley. The Women’s World Cup goes into quarterfinals today.

How well did you keep up with the news this week? Take our quiz.

Five more top stories

1. Exclusive: UBS has begun the process of killing off Credit Suisse’s international brand, replacing signs at the collapsed bank’s US headquarters in New York and planning changes at other key sites, including its head office in London’s Canary Wharf, according to people familiar with internal discussions. Read the full story.

2. US headline inflation last month rose to 3.2 per cent, slightly up from the month before. The smaller than expected price increase supports the case for the Federal Reserve to hold interest rates steady at its next meeting in September. Here’s more from July’s data.

3. Amazon is tracking attendance and targeting US employees who fail to return to office. The company has sent emails to workers for “not currently meeting our expectation” of being at the workplace at least three days a week, prompting privacy concerns. Here’s how the Seattle-based tech giant is monitoring its staff.

4. Three French police officers have been charged over the death of a man during the unrest that rocked the country last month. Prosecutors said yesterday the officers were suspected of “armed assault that led to the unintentional death” of Mohamed Bendriss because they shot him with a gun that fires rubber balls. Here’s more on the probe into the sole death from the police’s crackdown on riots.

5. China is making a push to dominate the trading of lithium carbonate futures, with its Guangzhou Futures Exchange becoming the fourth global commodities exchange to launch contracts tracking the price of the mineral used in electric-car batteries. Open interest far outstripped activity at rivals in the UK, US and Singapore within three weeks. Read the full story.

• US-China: Dozens of American venture capital firms face an uncertain future after President Joe Biden announced a ban on US investment in some of China’s critical tech industries.

• China Focus: The FT’s best reporting on the world’s second-largest economy, in one place.

News in-depth

This week’s surge in European gas prices underscores how the region’s success in weaning itself off Russian energy has left it more vulnerable to the ebb and flow of volatile global energy markets. While Europe managed to avert an energy crisis last year by rapidly increasing imports of liquefied natural gas, its newfound dependence on the fuel has left it competing with Asia for supplies.

We’re also reading . . . 

• Wilko’s demise: After almost a century of selling DIY products and household items, the UK discount chain has collapsed. Here’s how it happened.

• Flight delays: About a third of flights from UK airports were cancelled or delayed in the first five months of the year, suggesting a new norm for post-pandemic travel.

• Middle East: More than half of young Arabs in north Africa and the Levant say they are actively trying to emigrate or considering leaving their home countries in search of better jobs abroad, research shows.

Chart of the day

About nine years ago in an article for the Spectator, Fraser Nelson calculated that on a gross domestic product per capita basis, and after adjusting for price differences, the UK would sit in 49th place out of the 50 US states, narrowly squeezing in ahead of Mississippi. Chief data reporter John Burn-Murdoch examines how true that claim is today.

Take a break from the news

The menu is the most vital piece of written communication in a restaurant’s armoury, but chefs don’t seem to care. Food journalist Tim Hayward takes aim at minimalist menus and explains how they are robbing diners of one of the best parts of the restaurant experience.

Additional contributions from Benjamin Wilhelm and Gordon Smith