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Ukraine’s sovereign bonds have surged in price as investors bet that the incoming US administration will push for a quick end to the war with Russia.

The dollar-denominated bonds have risen 12 per cent in the past month, in expectation that the re-election of Donald Trump will lead to a ceasefire and boost Ukraine’s capacity to repay creditors.

The jump in the price of Ukrainian bonds, which one investor in the country called “the unlikeliest Trump trade ever”, comes as bets relating to the new administration have swept global financial markets in recent weeks.

Trump 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.

The rally has 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.

Bond investors are betting that the country will be prepared to accept a peace deal that involves permanently giving up territory it has lost in the war, and that its economy will recover quickly in the years ahead.

“The main part of the trade has really been based on the war ending, or at least the possibility of Trump pushing through the start of negotiations,” said Thys Louw, portfolio manager at Ninety One, which owns some Ukrainian bonds.

Among investors to own significant holdings of Ukrainian debt is fund manager BlackRock, which was a member of the bondholder committee that led the restructuring talks. BlackRock declined to comment.

Ukrainian debt has outperformed emerging market indices since mid-October, when markets began to price in a Trump election victory.

Ukraine’s bond maturing in 2036 has risen from 44 to 49 cents on the dollar over the past month. So-called “GDP warrants” — debt securities issued under an older debt restructuring that will benefit from the country’s return of growth — having climbed even more sharply.

A bond owed by Ukrenergo, Ukraine’s state grid operator, has rallied more than 160 per cent this year to 67 cents on the dollar, despite renewed Russian attacks on infrastructure.

London-based hedge fund firm Shiprock Capital has profited from the jump in the warrants and Ukrainian corporate debt and is up 31 per cent this year to the end of October, according to an investor letter seen by the Financial Times.

Shiprock did not respond to a request for comment.

During the early stages of the war, bondholders agreed to a halt on Kyiv’s interest payments. The September restructuring, which is designed to pave the way for Ukraine’s return to bond markets, ended the two-year freeze.

Under the September deal, investors agreed to take losses of more than a third on their bonds to help Ukraine control its surging wartime deficits — years before official creditors such as the UK, the US, Germany and Japan are set to restructure their own debts.

In return for agreeing to accept upfront losses, bondholders were also given the chance to receive higher payouts if Ukraine’s war-ravaged economy beats growth targets in the years ahead.

Some investors have cautioned that the outlook for Ukraine’s bonds is far from clear.

Mohammed Elmi, a portfolio manager at Federated Hermes, said he was sceptical of the market’s belief in Trump’s ability to secure a rapid peace deal.

“I don’t fully subscribe to that kind of bullish view,” he said. “There is still a significant amount of unanswered questions” about where a settlement would leave Ukraine’s postwar economy and whether it would be a priority for the new US administration.

“Trump has a lot to do, with a big policy agenda to go through. These negotiations could also be quite prolonged,” he said.

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Your guide to what the 2024 US election means for Washington and the world

Republicans have won a majority in the House of Representatives, giving Donald Trump’s party full control of both chambers of the US Congress and wide latitude to push a radical agenda through the legislature.

Democratic House leader Hakeem Jeffries congratulated Republican Speaker of the House Mike Johnson late on Wednesday, after several TV networks projected Trump’s party would retain control of the House.

“House Democrats gave it our all, running aggressive, forward-looking and people-centred campaigns,” Jeffries said. “While we will not regain control of the Congress in January, falling just a few seats short, House Democrats will hold Republicans to a razor-thin majority.”

The House verdict comes more than a week after Trump won a convincing election victory over Kamala Harris in the presidential race and means that when he is inaugurated in January his party will control the House and Senate.

The unified government will hand Trump considerable freedom to push through his legislative agenda, including plans to renew and expand sweeping tax cuts.

The House result, which came after more than a week of counting in California and other states, is a blow to Democrats, who will be minorities in both the Senate and House and unable to lead powerful congressional committees to oversee investigations into the Trump administration’s actions.

Eleven House races have still yet to be called, and the margin of the Republican majority has yet to be confirmed. But TV networks declared Trump’s party would keep control of the House because Republicans had secured the 218 seats necessary to have a majority in the 435-member body. The Financial Times’ tally of House results, which is based on race calls by the Associated Press, showed Republicans still one shy of the majority at 6.45pm on Wednesday.

Republicans will also have a firm grip on the Senate — where Democrats have held a slim majority in the current Congress — after picking up four seats in Pennsylvania, Ohio, West Virginia and Montana.

Republican senators on Wednesday elected John Thune to replace Mitch McConnell as the party’s leader in the upper chamber. McConnell, 82, remains a senator but said last year he would step down from leadership following a series of health issues.

Johnson, the Republican congressman from Louisiana and close ally of Trump who became Speaker last year, has said he intends to remain in the role.

Trump also presided over a unified government in the initial two years of his first administration, in 2017 and 2018, before Democrats won back control of the House in the 2018 midterm elections.

But many in Washington expect Trump to exert a tighter grip on Congress this time around, given the unwavering loyalty he commands from many top lawmakers, including the leaders of both chambers. In his first administration, he often faced opposition from McConnell and then-Speaker Paul Ryan.

Still, Trump will not have unchecked power over Congress, and Democrats may be able to exert leverage over his administration in narrow but meaningful ways.

Although budget and tax changes require only a simple majority of both chambers, and the president’s appointments can also be confirmed with the backing of 50 senators, most other legislation will need to break the Senate filibuster — a 60-vote threshold — to become law.

That means Senate Democrats could block other Trump legislative priorities — including laws to crack down on immigration at the US-Mexico border, or repeal the Affordable Care Act, commonly known as Obamacare — unless Senate Republicans take the drastic step of scrapping the filibuster altogether. Thune on Wednesday said the filibuster would be “unchanged” so long as he was Senate majority leader.

Donald Trump ruffled more than a few feathers on Capitol Hill when he announced Wednesday he’d called on Matt Gaetz to be his next Attorney General.

Gaetz, 42, is among the most controversial lawmakers in Congress, having been accused of a number of controversies; including showing photos of naked women on the House floor and an investigation into potential sex trafficking.

Before the Floridian can join Trump’s cabinet as the nation’s top law enforcement official, he’ll have to endure a Senate confirmation hearing that’s sure to see him questioned on his laundry list of scandals.

Lone ‘no’ vote on anti-human trafficking bill

Back in 2017, the freshman congressman Gaetz wasn’t a national name yet. Still, he turned heads across the country after he was the lone “no” vote on an anti-human trafficking bill that easily passed both the House and Senate.

Gaetz explained—from a Facebook Live in his living room—that he voted no because he felt the bill, the Combating Human Trafficking in Commercial Vehicles Act, would represent “mission creep” at the federal level. In layman’s terms, he felt the bill would lead to more government bureaucracy than was needed, though he agreed with the bill’s goal. Gaetz was still slammed for being the lone opposing vote, however, and his “no” vote resurfaced years later during the fallout of his alleged sex trafficking probe.

Bringing right-wing troll to SOTU

Gaetz was again the subject of eye-rolls across the nation in 2018 when he brought the far-right internet troll Chuck Johnson to the State of the Union address. Making the guest choice all-the-more baffling was that some of Gaetz’ colleagues from Florida had opted to bring survivors of a devastating hurricane and the family of a hostage in Iran.

Gaetz, meanwhile, found it appropriate to bring Johnson; a man who’d been banned from Twitter, accused of white nationalism and Holocaust denying, and who was perhaps best known for proliferating fake news stories. Gaetz told the Daily Beast at the time that he gave Johnson a ticket simply because he showed up at his office on the day of the speech. Johnson, meanwhile, said he was a fan of Gaetz because he he has “that f–k you mindset.”

‘Witness intimidation’ of Michael Cohen

Gaetz had turned himself into a national firebrand by 2019, acting as a staunch defender of Donald Trump who frequently appeared on Fox News. It was this year that Gaetz—one day before Michael Cohen was slated to speak before the House Oversight Committee—accused Trump’s former-fixer-turned-foe of being unfaithful to his wife, in what came off as a veiled threat.

Gaetz, tagging Cohen’s account on Twitter, wrote: “Do your wife & father-in-law know about your girlfriends? Maybe tonight would be a good time for that chat. I wonder if she’ll remain faithful when you’re in prison. She’s about to learn a lot…”

The post was deleted after Gaetz was admonished for ever making the post. Gaetz insisted it wasn’t “witness intimidation” but was instead just “witness testing.” The Florida Bar opened a probe into Gaetz but ultimately cleared him.

Nestor, the hidden Cuban ‘son,’ emerges

In the summer of 2020, Gaetz got into a fiery altercation with the former Rep. Cedric Richmond during a congressional hearing on police reform. During a heated back-and-forth, Gaetz exploded at Richmond for suggesting he didn’t know what it was like to fear for a Black son.

Gaetz was unmarried and—as far as the public knew—childless at the time, so many were left scratching their heads after his exchange with Richmond. That same day, however, the Florida congressman took to Twitter to post a photo of who he described was “my son Nestor,” was a 19-year-old from Cuba who’d apparently lived with him for six years. “We share no blood but he is my life,” Gaetz said. He also emphasized in his post that Nestor came to Florida “legally.”

Gaetz and Nestor’s relationship has since been scrutinized, however. Nestor is the son of Gaetz’s ex-girlfriend and spent time living with both Gaetz and his blood family in Florida. Gaetz was also discovered to have described Nestor in social media posts as a “local student” in 2016 and as “my helper” in 2017.

Sex trafficking probe

The New York Times published a bombshell report in 2021 that claimed Gaetz was being investigated by the Department of Justice for sex trafficking. Among the allegations against Gaetz was that he had sex with a 17-year-old girl and paid for her to travel across state lines. “It is verifiably false that I have traveled with a 17-year-old woman,” he told the publication at the time.

In the end, the DOJ announced last year that no charges would be filed against Gaetz and that its probe was complete. However, his pal, the Florida tax collector Joel Greenberg, pleaded guilty to a slew of sex crimes and was sentenced to 11 years in prison. In 2021, the Daily Beast reported on a confession letter that was penned by Greenberg in which he claimed that Gaetz had paid him to arrange sex with several women and a girl who was 17. The Beast also revealed private Venmo logs that showed Gaetz sent money to Greenberg, even using a nickname for the adolescent.

While Gaetz has been absolved legally, the scandal hurt his reputation on the hill and has seemingly led to unsavory stories about the lawmaker. Recently, that included court docs emerging in September that alleged Gaetz was at a party in 2017 with a naked high school junior who was there to “engage in sexual activities” while drugs like cocaine and ecstasy were present.

Naked pics on the House floor

A CNN report alleged in 2021 that Gaetz had proudly showed images and clips of naked women he’d been sleeping with to aides and lawmakers while in the U.S. Capitol and on the House floor. Among the alleged videos shown on Gaetz’ phone was a nude woman with a hula hoop. A source told CNN the seedy clips were a “point of pride” for the congressman.

CNN’s report suggested that the allegedly sordid conduct from Gaetz was part of a trend from the congressman. The network reported that staff who worked for former House Speaker Paul Ryan once had to meet with Gaetz during his first term to lecture him about behaving professionally on the House floor.

Gaetz denied CNN’s report “in the strongest possible terms.” Just before the story broke, Gaetz claimed that he and his family had been “victims of an organized criminal extortion involving a former DOJ official seeking $25 million while threatening to smear my name.”

Can you spare a pardon?

While perhaps his least-controversial scandal, Gaetz was thoroughly grilled in 2022 when testimony from a Trump attorney—emerging as part of a Jan. 6 Committee hearing—revealed that the lawmaker had allegedly asked for a sweeping pardon from Trump during his final days in office.

That attorney, Eri Herschmann, said in a deposition that Gaetz had requested a presidential pardon “from the beginning of time up until today, for any and all things.” Cassidy Hutchinson, an ex-White House adviser, also testified that Gaetz had been seeking a pardon since “early December” in 2020, but she said she was unsure why.

After the deposition clip emerged, Gaetz dismissed the committee as a “political sideshow” while other lawmakers, like the former Republican Representative Adam Kinzinger, remarked that the request was proof Gaetz was up to no good. “The only reason you ask for a pardon is if you think you’ve committed a crime,” Kinzinger said.

House Ethics Committee probe emerges

Likely the most pressing scandal to Gaetz today is a House Ethics Committee probe that was opened last year. The probe, which was initially opened in 2021 but put on ice, is investigating Gaetz for sexual misconduct, illicit drug use, misuse of state identification records, and bribery.

Gaetz denied wrongdoing when the probe was announced in 2023 and said it was “not something I’m worried about.” He also suggested he was being targeted over his politics, saying, “It’s also funny that the one guy who doesn’t take the corrupt lobbyist and PAC money seems to be under the most Ethics investigations.”

The probe remained open as of Wednesday however by Wednesday evening, House Speaker Mike Johnson told reporters Gaetz will resign from Congress “effective immediately” following his nomination to serve as attorney general by President-elect Trump, effectively killing it.

When news broke of Gaetz’ appointment, ABC News reported that there was an “audible gasp” in a room of House Republicans who were meeting behind closed doors.