Daily Overview of Global Markets & the SEE Region Monday, September 28, 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: Asian bourses kicked off the week mixed and European stock markets broadly fell at the time of writing on caution ahead of significant macro announcements including, among other, China’s PMI on Thursday and US nonfarm payrolls on Friday. In FX markets, the DXY US dollar index consolidated around levels of 96.300 in early European trade, while the EUR/USD modestly eased on recent Fed Chair Yellen’s comments for a possible rate hike later this year and supportive macroeconomic US data released late last week. Focus today is on FOMC voting members’ speeches. On the US data front, the personal spending and income growth as well as the headline and core PCE deflator for August are in focus today.

GREECE: In a discussion between the Prime Minister Alexis Tsipras and former US President Bill Clinton, organized yesterday by the Clinton Foundation in Washington, the Greek PM stressed the commitment of the new government to reforms in order to fight tax evasion, establish meritocracy in the public administration and curtail corruption. According to data published on Friday by the Bank of Greece, the annual growth rate of total credit extended to domestic private sector stood at -1.6% in August, against -1.5% in the previous month.

SOUTH EASTERN EUROPE

BULGARIA: Trailing losses in emerging stock markets, the local equity market retained its downward trajectory last week. Meanwhile, local sovereign yields saw some adjustment to the upside.

ROMANIA: The EUR/RON traded within a very tight range between 4.4160/270 for most of last week. On the money market, short term rates rose, while longer rates were roughly unchanged. Meanwhile, RON-denominated government bonds extended their post-Fed relief rally last week, with the yield curve undertaking some bullish-flattening.

SERBIA: The EUR/RSD closed modestly lower around 119.65/85 last week, having broken below key support level of 120.00, amid increased euro supply in the FX market. At this junction, we anticipate consolidation around current levels to prevail. Yet, further EUR/RSD downside cannot be ruled out, but will be conditional on the lack of new Central Bank intervention.

CESEE MARKETS: CESEE assets were broadly mixed in early European trade on Monday, ahead of upcoming key data releases and events over the next few days. Looking into this week, a no-confidence vote in Romania against the government of Prime Minister Ponta (Tuesday) and Romania’s MPC meeting (Wednesday) take centre stage in the region. Globally, focus is on China’s September manufacturing data on Thursday and September’s non-farm payrolls from the USon Friday.

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Daily Overview September 28 2015

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