Daily Overview of Global Markets & the SEE Region (Wednesday, February 03, 2016)

Associations, Markets, Reports, Statistics, Stock Markets — By on February 3, 2016 at 11:17 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: Mirroring the negative tone in Wall Street overnight, most Asian equities closed in the red on Wednesday as energy stocks were pressured by a renewed drop in oil prices. Increased risk aversion favored the safe-haven allure of the JPY with the USD/JPY retreating to levels below 120.00 in European trade. On the data front, focus today is on the US ADP private sector employment report ahead of the key non-farm payrolls data due on Friday.

GREECE: A new round of discussions between the ECB/EC/IMF/ESM mission heads and Minister of Labour, Social Insurance and Social Solidarity Georgios Katrougalos on the planned overhaul of the social security system is scheduled to take place today at 4:30pm Athens time. According to the local press, the heads oppose the government’s proposal for a total increase of 1.5% in social security contributions claiming that it would hammer business competitiveness. Meanwhile, speaking to reporters yesterday, Government spokesperson Olga Gerovasili denied any scenarios of a snap election or formation of an ecumenical government.

SOUTH EASTERN EUROPE

ROMANIA: Retail sales in December maintained the same impressive speed on an annual basis, expanding at the highest rate in seven years. On a seasonally and working day adjusted basis, retail sales expanded by +0.6% mom/+13.0% yoy up from +2.3% mom/+12.8% yoy in November and compared to +2.1% mom/+12.7% yoy in October. At the same time, the unemployment rate came out at 6.7% in December unchanged compared to November, though a notch up from 6.6% recorded in December 2014.

CESEE MARKETS: Emerging stock markets broadly extended this week’s losses earlier on Wednesday as oil prices remain near recent lows, while downbeat corporate earnings results from Europe also weighed on investor sentiment. On the other hand,  CESEE market assetsappeared to be faring better than their global EM peers, possibly thanks to increased optimism about further monetary stimulus by the ECB as soon as in March. Today, the MPC meeting in Poland takes centre stage in the CESEE region. The Central Bank is broadly anticipated to stay put on its monetary policy maintaining its key benchmark rate at the current record low of 1.50%.

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Daily Overview February 3 2016

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