Global markets are increasingly convinced that the US Federal Reserve will restart interest rate cuts this month after weaker-than-expected jobs data, fuelling demand for bonds but weighing on equities, while Ukraine’s central bank moved to strengthen the hryvnia as reserves surged on international aid inflows, the country’s ICU investment firm said in a recent analytical report.

The August US labour market report showed job growth at barely a third of forecasts, with unemployment rising to 4.3% from 4.2% in July. Coupled with dovish remarks from senior Fed officials, the release hardened expectations that the central bank will ease policy at its September meeting.

By the end of last week, futures pricing suggested a 93% probability of a 25-basis-point cut and a 7% chance of a more aggressive 50-point move. Ten-year Treasury yields slid 15 basis points over the week to 4.07%, the lowest in a year.

Equities reacted with caution. The S&P 500 shed early gains to finish the week nearly flat at +0.3%, while the tech-heavy Nasdaq 100 rose 1.0% thanks to robust sector-specific news. Chipmaker Broadcom posted strong second-quarter earnings, and Alphabet benefited from a softer-than-expected antitrust ruling. By contrast, Europe’s Stoxx 600 fell 0.2%.

The weaker jobs backdrop also shaped commodities trading. Gold rose 4% and silver 3% on safe-haven flows, while oil dropped 4% on fears of slowing demand and speculation that Saudi Arabia may increase output from October.

Ukraine bond supply and currency moves

Ukraine’s domestic bond market also saw developments. The Finance Ministry will auction UAH5bn ($122mn) of reserve bonds on September 9, the only such issue scheduled for the month. These instruments, first sold in August, have already raised UAH15bn across two auctions. The new sale will lift the total to UAH20bn.

Since January, the ministry has placed over UAH113bn of reserve bonds while redeeming only UAH59bn, leaving UAH332bn outstanding. Just UAH20bn are due for repayment this year, in November. Analysts say the strategy reflects Kyiv’s push to stabilise government financing in wartime conditions and to provide domestic banks with instruments that count toward reserve requirements.

Meanwhile, the National Bank of Ukraine (NBU) unexpectedly strengthened the hryvnia at the start of September. After holding the official exchange rate at around 41.35-41.37 per dollar, the central bank set it at 41.22 on September 5, its strongest since April. The move came as the NBU sold an estimated $120mn from reserves that day, part of $551mn in interventions over the week.

The currency market deficit widened by nearly a third to $390mn, reflecting reduced sales of foreign currency by both banks and households. Even so, weekly interventions remain below the wartime average, indicating that the NBU is managing pressures without drawing heavily on reserves.

Reserves boosted by external aid

Ukraine’s gross international reserves rose sharply in August, up 7% on the month and 5.1% since the start of the year to $46.0bn. The increase was driven by inflows of $4.7bn under EU’s Ukraine Facility and ERA programmes, as well as $1.1bn from the World Bank.

These inflows outweighed $2.7bn in currency interventions and $0.7bn in external debt servicing by the government and the NBU.

Investment group ICU said the outcome was expected given the scale of international financial support. It forecast reserves would continue to rise into 2025 as aid inflows outpace foreign exchange sales, with levels likely to exceed $55bn by year-end. “At least over the next 12 months, the NBU will be able to fully control the currency market and the hryvnia’s exchange rate,” the firm said.

Balancing global and domestic pressures

The contrasting developments highlight how global monetary shifts and local stabilisation measures are shaping investment sentiment. For international markets, the Fed’s likely policy pivot promises relief after two years of tightening, with bonds emerging as the main beneficiary and equities caught between rate hopes and recession fears.

For Ukraine, resilience rests on steady donor support and cautious monetary management. The hryvnia’s firming, together with the bond issuance strategy, points to authorities seeking both financial stability and investor confidence as the war continues, the ICU said in its report.