Daily Overview of Global Markets & the SEE Region (Wednesday, May 6, 2015)

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Dr. Platon Monokroussos,  Chief Market Economist, Deputy General Manager, Eurobank Ergasias S.A

Dr. Platon Monokroussos, Chief Market Economist, Deputy General Manager, Eurobank Ergasias S.A

HIGHLIGHTS

WORLD ECONOMIC & MARKET DEVELOPMENTS

GLOBAL MARKETS: The recent bearish trend on US Treasuries and German bonds remained intact today mainly due to expectations for higher Fed interest rates later this year, improved euro area growth prospects and somewhat easing euro area deflation woes on the back of the ongoing implementation of the ECB’s QE programme.  Focus today is on the US’ ADP April employment report and FOMC Chairman Janet Yellen who is scheduled to speak at the Institute for New Economic Thinking Conference on Finance and Society in Washington, D.C later today.

GREECE: In a statement released y-day, the Greek government highlighted “serious disagreements and contradictions between the IMF and the European Union which create obstacles in negotiations and high risks”. Meanwhile, the IMF rejected recent press reports suggesting that it insisted at the April 24 Eurogroup that further debt relief for Greece is necessary as the country’s public debt is deemed as not sustainable. All eyes today are on the ECB which convenes later today to review, among others, Greek banks’ access to the ELA funding facility. In other news, according to the EU Commission’s Spring 2015 European Economic Forecast, Greece’s real GDP is now projected to grow by around 0.5% in 2015 from 2.5% previously assuming that, “by June, business confidence returns along with the liquidity of the government and banking sector”.

SOUTH EASTERN EUROPE

BULGARIA: At its European Economic Forecast (Spring 2015), released yesterday, the European Commission said that it expects real GDP growth to decelerate to 1.0% this year from 1.7% in 2014.

ROMANIA: Retail sales decreased by 1.6%MoM on a seasonally adjusted basis in March, bringing the annual rate of decline to 0.5%.

SERBIA: At its Spring 2015 European Economic Forecast, the European Commission noted that Serbia’s economy is anticipated to slowly emerge from recession, highlighting though that growth prospects remain fragile.

CESEE MARKETS: Taking their cue from losses in Asian and European stock markets yesterday, the majority of emerging boursesclosed in the red on Tuesday. Most CESEE indices also lost ground, weighed further down by worries over the progress of negotiations between Greek authorities and the Institutions. In a similar mode,  CEESE currencies and government bonds closed broadly weaker. Market caution also prevailed ahead of today’s key monetary policy meeting announcements in Poland and Romania, where both Central Banks are anticipated to stay put on interest rates.

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Daily Overview May 6, 2015

 

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