Published by Global Banking & Finance Review®
Posted on February 19, 2025
2 min readLast updated: January 26, 2026
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JPMorgan sees a Ukraine peace deal as positive for nearby currencies, though much of the boost may be priced in. Ukraine bonds and GDP warrants could benefit.
By Marc Jones
LONDON (Reuters) - A ceasefire or peace deal to end the war between Ukraine and Russia would be "net positive" for the currencies of nearby emerging economies, investment bank JPMorgan said on Wednesday.
Much of that boost, though, may already be factored in, it said in a research note.
JPMorgan added that it was keeping a neutral or "market weight" stance on Ukraine's government bonds until there was more clarity on the details of a peace deal."Even as a ceasefire appears closer, a likelihood of a sustainable peace deal acceptable to all sides remains a question mark," the note said.
Sovereign debt markets already price close to a 70% probability of a durable peace deal, it estimated.
In the most optimistic scenario, Ukraine bonds would likely see the most positive impact while its so-called GDP warrants - bond-like instruments that pay out when Ukraine's economy grows strongly - have a more "limited" upside.
U.S. President Donald Trump's surprise move last week to hold bilateral talks with Russia about ending the near three-year long war has taken Ukraine and European capitals aback and sparked fevered speculation about how a ceasefire would work.
Trump has continued to stoke tensions since and denounced Ukrainian President Volodymyr Zelenskiy on Wednesday as "a dictator without elections", saying he needed to move fast to secure peace or he would have no country left.
It added that outside Ukraine, Hungary and Turkey's currencies could be the biggest beneficiary if a ceasefire deal helps brings down European gas prices by allowing Russian gas to be bought more freely again.
Hungary is the most gas-intensive economy in the region, footing the biggest gas import bill worth 4.9% of its GDP at the 2022 peak in prices, and 1.3% in 2024.
Ukraine's economy will benefit from the post-war rebuild effort. Yearly reconstruction needs likely significantly exceed $35 billion and are possibly up to $50 bn per year/
However "the risk of Russia restarting the war will limit any appetite for large reconstruction activities," JPMorgan cautioned.
(Reporting by Marc Jones, editing by Libby George and Chizu Nomiyama)
The article discusses JPMorgan's view on how a Ukraine peace deal could impact nearby emerging market currencies.
In the most optimistic scenario, Ukraine bonds would likely see the most positive impact from a peace deal.
Hungary and Turkey's currencies could benefit if a ceasefire helps reduce European gas prices.
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