Ukrainian Eurobond prices rose by an average of 1.5% last week as investors responded positively to renewed US-led efforts to restart negotiations aimed at ending Russia's war against Ukraine, although subsequent diplomatic contacts failed to produce a significant breakthrough, reported Ukraine Business News.

The market reacted positively on September 4 ahead of another attempt over the weekend to intensify negotiations involving the United States, Ukraine and Russia. The rally reflected the continued sensitivity of Ukrainian sovereign debt to developments in the peace process.

Representatives of US President Donald Trump subsequently travelled to Moscow and Kyiv as Washington sought to revive negotiations, but the visits did not result in significant progress.

Another key development for investors was Ukrainian Finance Minister Serhiy Marchenko's statement that the country's uncovered state budget financing needs for 2027 are currently estimated at $33bn.

Marchenko stressed that the growing financing gap should not affect Ukraine's external creditors. Analysts at ICU similarly said the sharp increase in estimated financing needs for next year was unlikely to create immediate risks for Eurobond holders.

However, they warned investors not to overlook the longer-term economic impact of the war.

"Investors should not ignore the growing direct and indirect losses to the Ukrainian economy from the war, as well as the significant increase in external financing needs in the coming years," ICU analysts said.