UKRAINE: Zelensky Vows Support For Graft Probe As 'Operation Midas' Shakes Gov't
Nov-13 10:30
In an interview for Bloomberg Television, Ukrainian President Volodymyr Zelensky pledged to support a full investigation into a corruption scandal involving his friend and former business partner Timur Mindich. The resurfacing accusations have time and again put the country's ruling elite on the radar, undermining its popularity amid Ukraine's efforts to repel the Russian aggression.
- The scandal broke out several days ago, the National Anti-Corruption Bureau of Ukraine (NABU) unveiled interim results of a large-scale probe into allegations of graft in the country's largest energy utility Energoatom. As part of 'Operation Midas', the authorities searched the flats of Justice Minister German Galushchenko (dismissed on Wednesday), who served as Energy Minister between 2021-2025, and Mindich, who had reportedly fled the country only a few hours earlier.
- The NABU subsequently charged seven people with counts of graft, while a source told Reuters that the agency suspected Mindich of being in charge of a $100mn kickback scheme. This prompted Prime Minister Yulia Svyrydenko to order an urgent audit at Energoatom, with the results expected to be handed to law enforcement agencies.
- Zelensky's team has been in conflict with the NABU for many months now, which culminated in a botched attempt to pacify the agency through a bill rushed through parliament on July 22. The reforms were reversed under pressure from Ukraine's foreign partners and civil society ('cardboard protests') as the first wartime anti-government rallies were held throughout the country.
- The latest corruption scandal is a severe setback for the Ukrainian authorities as the public is facing the prospect of continued power outages caused by continued Russian strikes on critical infrastructure, while foreign constituencies demand greater scrutiny of the funds donated to Ukraine to support its war efforts.
- While the scandal is believed to have the potential to bring down Zelensky, his role remains unclear, with some analysts turning their focus to his controversial top aide Andriy Yermak. Furthermore, the anti-corruption bodies have proven resilient and capable of rising to the challenge, which might help reassure Ukraine's partners.
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ESM ISSUANCE: 2.75% Feb-35 ESM bond E1bln WNG Tap: Allocations
Oct-14 10:29
- Size: E1bln WNG (We had pencilled in a E1.0-1.5bln range for this week's ESM transaction, but leant towards a E1.25bln size rather than the E1bln WNG announced. Following today's sale, total ESM funding for the year will be broadly in line with the E7bln annual target)
- Books in excess of E18.5bln (exc. JLM interest)
- Final terms set earlier: MS + 31bps (Guidance was MS +34bps area)
- Hedge ratio: 98% vs 2.50% Feb-35 Bund (DE000BU2Z049)
- Settlement: Oct. 21, 2025 (T+5)
- ISIN: EU000A1Z99W5
- Bookrunners: HSBC, MS (B&D), Natixis
- Timing: Hedge deadline 11:55BST / 12:55CET
Source: Bloomberg / MNI colour.
US DATA: Small Businesses See Stronger Price Pressures In Sept After A Soft Aug
Oct-14 10:24
The NFIB small business survey saw a small decline in business confidence in September, with supply chain and inflation issues taking more prominence again after a dovish August report. Of note, the share expecting to increase prices over the next three months ticked back close to recent highs seen in June, more clearly consistent with above target inflation.
- The NFIB small business optimism index surprisingly fell 2pts in September to 98.8 (cons 100.6) after 100.8 in August, its first decline in three months for its lowest since June.
- From the overview (link): “While most owners evaluate their own business as currently healthy, they are having to manage rising inflationary pressures, slower sales expectations, and ongoing labor market challenges. Although uncertainty is high, small business owners remain resilient as they seek to better understand how policy changes will impact their operations.”
- “Supply chain and inflation issues stood out as a key problem in the report.” Indeed, price metrics bounced in this latest September survey after a dovish backdrop to August’s report.
- Specifically, the net share raising average selling prices compared to three months ago bounced back 3pts to 24% after the 21% reported in August was the lowest since Oct 2024. It averaged 23% in 2024 or ~12% pre-pandemic.
- The net share expecting to increase prices over the next three months meanwhile increased 5pts to 31%, close to June’s recent high of 32% after the 26% in August was its joint lowest since Sep 2024. This series averaged 28% in 2024 and 22% pre-pandemic, although it does of course remain far below some sustained readings in the 50s in 2021/22.
- “In September, 64% of small business owners reported that supply chain disruptions were affecting their business to some degree, up 10 points from August.”
- The already released jobs figures (link) had noted that “a seasonally adjusted 32% of all small business owners reported job openings they could not fill in September, unchanged from August. The last time unfiled job openings fell below 32% was in July 2020. […] A seasonally adjusted net 16% of owners plan to create new jobs in the next three months, up 1 point from August and the fourth consecutive monthly increase. Hiring plans are at their highest level since January.”
BUNDS: /SWAPS: 10-Year Swap Spread Back Above 0bp, Bunds Outperform On Risk-Off
Oct-14 10:22
Broader risk-off flows surrounding increased Sino-U.S. trade tensions drive German bond outperformance vs. swaps today, with long end spreads leading the move.
- The German 10-Year swap spread trades back above parity and is set to register the highest close since July at prevailing levels. Meanwhile, the 30-Year swap spread sticks within its recent range.
- Bund ASWs also rally, printing the highest levels seen since early August.
- While an increase in German issuance and the ECB’s QT factored into the removal of bond scarcity, today’s move underscores the safe haven appeal of German paper, even with issuance set to increase.
- Zooming out, the move away from cycle/all-time lows in swap spreads & ASWs signal that the market is seemingly a little more at ease with the incoming jump in issuance, which wasn’t as immediate as feared back in March.
- This comfort is further bolstered by the skew away from the long end when it comes to the increased German funding needs and the DFA’s lack of willingness to launch 50-Year issuance at this stage.
- Ongoing questions surrounding the quantity of viable projects to be financed by the increased fiscal support have also removed related pressure for Bunds over a multi-month horizon.
