Ukrainian Eurobonds rebounded at the end of the week after a sharp selloff, as optimism over potential US-Ukraine talks helped offset pressure from rising global government bond yields, investment firm ICU said, reported Ukraine Business News.

Ukrainian bonds fell by more than 3% on average, with some issues losing as much as 4%, after a rise in US and European government bond yields pushed debt prices lower across emerging markets.

The selloff underscored the sensitivity of Ukrainian debt to global market movements, but prices recovered on Thursday and Friday as investors responded to news of talks between US President Donald Trump and Ukrainian President Volodymyr Zelenskiy during the United Nations General Assembly in New York.

ICU said the sharp swings highlighted the significantly higher volatility of Ukrainian bonds compared with other emerging-market debt. Investors have tended to react strongly to even limited indications of progress towards a potential settlement of the war, its analysts said.

The trading pattern illustrates the extent to which diplomatic developments can provide short-term support for Ukrainian assets even when broader financial conditions are deteriorating. But the recovery has not removed wider risks facing the market.

ICU remains sceptical about the prospects of a settlement in the foreseeable future and expects Ukrainian bond prices to remain under pressure in the coming months.