Investors bet on Donald Trump’s promise to end Ukraine war

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Today’s agenda: Republicans win House majority; Germany’s warning against Russian LNG; HRW’s report on Israel; EU’s growth prospects; and the rise of padel

Good morning. Our top story comes from Ukraine, where the price of sovereign bonds has risen 12 per cent in the past month as investors bet that the incoming US administration will push for a quick end to the war with Russia.

What has fuelled the rally? While the jump coincides with financial markets’ expectation that the re-election of Donald Trump will lead to a ceasefire, it has also come just over two months after Kyiv completed a restructuring of more than $20bn of debt in one of the fastest and biggest sovereign debt workouts in modern history. One investor in the country described it as “the unlikeliest Trump trade ever”.

What’s the outlook? The president-elect has said he will end the war in Ukraine “within a day” of returning to the White House, though he has not offered specifics on how this would be achieved. Bondholders are betting Kyiv will be prepared to accept a peace deal that involves permanently giving up territory it has lost in the war.

Ukrainian debt has outperformed emerging market indices since mid-October. Nevertheless, some investors have cautioned that the outlook is far from clear, with one portfolio manager saying he was sceptical of the market’s belief in Trump’s ability to secure a rapid peace deal.

Read the full story — and scroll down for more analysis on Trump 2.0.

How will Donald Trump’s presidency transform global trade and financial markets? Pose your questions to FT journalists in a live Q&A at 3pm GMT/10am ET today. You can leave your questions in the comment section under this article, and add the event to your calendar here.

Here’s what else we’re keeping tabs on today:

Economic data: The EU releases its third-quarter GDP estimate, and the International Energy Agency publishes its monthly oil market report.

US: President Joe Biden heads to Peru for the Asia-Pacific Economic Cooperation summit.

UK: Chancellor Rachel Reeves delivers her first Mansion House speech.

Companies: 3i Group, Burberry, Deutsche Telekom, Eon, Premier Foods, Qinetiq and Walt Disney Company are among those reporting. See our Week Ahead newsletter for the full list.

Five more top stories 1. Republicans have won a majority in the US House of Representatives, giving the party full control of both chambers of Congress and providing Donald Trump wide latitude to push his radical agenda through the legislature. Read the full report.

Pete Hegseth: The Iraq and Afghanistan war veteran who gained notoriety by blaming “wokeness” for US military failures is now set to be in charge of the world’s largest, most powerful and probably most bureaucratic military.

Sign up for our White House Watch newsletter for more updates from Washington as it braces itself for Trump’s second term.

2. Exclusive: Germany has warned its state-operated gas import terminals to reject any Russian cargoes of liquefied natural gas after it was notified of a planned shipment. In a letter seen by the FT dated November 6, the German economic ministry said the order was issued to protect the country’s “overriding public interests”.

3. UK chancellor Rachel Reeves is to legislate the development of eight pension “megafunds” as part of reforms to Britain’s fragmented local government retirement scheme that she claims could unlock £80bn of investment. Reeves told the FT she was also targeting a minimum size for multiemployer defined contribution pension schemes of £25bn to £50bn, which she called a “massive change”.

4. Israeli authorities have deliberately caused the mass displacement of Palestinians in Gaza, Human Rights Watch said in a report yesterday. The 154-page report said Israel’s hostilities — during which 1.9mn of Gaza’s 2.2mn people have been displaced, according to the UN — amounted to “forced displacement” and “a crime against humanity”.

5. Government spending cuts in the EU are set to hit investment and growth at a time when the region is already struggling to keep up with the US, economists have warned, as Brussels plans to rein in budget deficits to a maximum of 3 per cent of GDP.

News in-depthAlan Bates is among those still awaiting full compensation from the British state © FT montage/PA More than two decades have passed since Sir Alan Bates first challenged the government-owned Post Office over shortfalls in his branch’s accounts. Five years after being vindicated in court — and almost a year since an ITV dramatisation spurred a political vow to expedite redress — the former sub-postmaster is still awaiting full compensation from the British state.

We’re also reading and listening to . . . Goldman Sachs: A deal with a prominent Chinese banker gave the US group access to China, but many see it as a cautionary tale for western institutions.

Nvidia: In an AI world led by the US company, the message to global chipmakers is clear: if you can’t beat it, join its supply chain, writes June Yoon.

Rachman Review 🎧: Former Australian prime minister Kevin Rudd talks to Gideon Rachman about how Marxist-Leninist theory still shapes Xi Jinping’s policy.

Chart of the day As global diabetes rates have doubled over the past 30 years, many middle- and low-income countries are failing to provide sufferers with sufficient access to treatment, according to an international study. The report published in The Lancet found that nearly 60 per cent of diabetics over 30 years old — totalling almost 450mn people — did not receive medication in 2022 despite the availability of off-patent pharmaceuticals.

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Take a break from the news Padel, billed as tennis’s rebellious younger sibling with its relaxed dress code and emphasis on socialising, has exploded in popularity in recent years, with fans including the Princess of Wales and Stormzy. Igor Ramírez García-Peralta has a go at the 30mn-strong racket sport that has taken over the world.

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