Daily Overview of Global Markets & the SEE Region (Friday, September 4, 2015)

Banking, Company Profiles, Finance, Markets, News, Person Profiles, Reports, Statistics, Stock Markets — By on September 4, 2015 at 9:56 AM
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: At yesterday’s regular monetary policy meeting, the ECB kept the interest policy rates unchanged and increased the issue share limit it can purchase under QE from 25% to 33%, while revising downwards both growth and inflation projections for 2015-17. Furthermore, speaking in the post-meeting press conference, President Mario Draghi noted that risks to the growth and inflation outlook remain on the downside while the Governing Council will closely monitor the external environment in order to decide for a possible adjustment in the terms of the QE programme including the size, composition and duration. In equity markets, US bourses gave up earlier gains ahead of today’s nonfarm payrolls report. Along these lines, most Asian markets closed in the red today, while major European equity indices opened lower, as concerns over the US employment report and its potential implications for the Fed’s monetary policy deliberations overshadowed the ECB’s willingness to take further steps to support the European economy if proved necessary.

GREECE: In a response to a question during yesterday’s post-meeting press conference about a possible reinstatement of a Greek collateral waiver, ECB President Mario Draghi said that a key precondition is Greece to comply with the financial assistance programme and demonstrate strong programme execution and ownership. The ECB President added that such a development would not be enough for the ECB’s expanded asset purchase program to envisage the purchases of Greek sovereign bonds and further conditions need to be in place.

SOUTH EASTERN EUROPE

ROMANIA: Retail sales rose by 1.1%MoM in July, bringing the annual rate of increase to a 13-month high of 8.5%, supporting the view that private consumption remains the leading growth driver in the domestic economy. In other news, the finance ministry sold on Thursday the planned amount of RON 400mn (~€90.16mn) in 3-year T-Notes at an average accepted yield of 2.01%, nearly in line with 1.96% achieved at a prior auction of the same paper held in early August. On the fiscal front, the  lower house of Parliament voted in favour of changes in taxation, including a cut in the main VAT rate to 20% from 24% scheduled to come into effect at the beginning of 2016. As was broadly anticipated, the changes were in line with those agreed by political parties last week.

CESEE MARKETS: Emerging stock markets moved broadly lower earlier on Friday as caution prevailed ahead of key labour data from the US due for release later in the day. It is also worth noting that Chinese bourses are closed for the second consecutive for holiday and will reopen on Monday. Along similar lines, most CESEE currencies weakened and government bonds were mixed in European trade on Friday.

Viewers can read the full report herebelow:

Daily Overview September 4 2015

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