Daily Overview of Global Markets & the SEE Region (Friday, May 05, 2017)

Company Profiles, Markets, News, Person Profiles, Reports, Statistics, Stock Markets — By on May 5, 2017 at 11:38 AM

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

HIGHLIGHTS

WORLD ECONOMIC & MARKET DEVELOPMENTS

GLOBAL MARKETS: Taking their lead from Asian equity markets’ lackluster performance, the majority of European bourses opened lower on Friday pressured by lower commodity prices. The modestly more hawkish-than-expected tone of the FOMC monetary policy statement earlier this week and market caution ahead of the US non-farm payrolls report for April -due later today- may also had some impact on market appetite for risk taking. Global equity markets’ poor performance favored the appeal of fixed-income safe havens. The 10-yr Treasury yield edged down to 2.35% earlier today after hitting a one-month high of 2.37% yesterday following the US House of Representatives’ approval to change major portions of Obamacare and replace it with a new Republican healthcare plan. In FX market, the EUR/USD rose to a six-month high of 1.0990 in early European trade two days before the final round of the French presidential election on Sunday, as Emmanuel Macron has reportedly increased his lead in the polls over his rival Marine Le Pen. Elsewhere, the fall in oil prices weighed on the Australian dollar and Canadian dollar. Investors’ focus today centres on the April’s US payrolls report, where the market consensus expects an increase to +190k from +98k in March. Several Fed officials, including Fed Chair Janet Yellen and Vice Chair Stanley Fischer, are also expected to speak later in the day.

GREECE: The Greek PM Alexis Tsipras is expected to address the SYRIZA parliamentary group today to brief them on the preliminary technical agreement that was reached with the institutions (EC/ECB/ESM/IMF) on May 2nd in the context of the 2nd programme review. The measures that are to be legislated will reportedly be submitted to the Hellenic Parliament by May 13th and voted by May 17th. The Euroworking Group (EWG) that convened yesterday discussed and welcomed the preliminary technical agreement but did not address issues pertaining to the debt-relief framework.

SOUTH EASTERN EUROPE

CESEE MARKETS: Emerging market assets traded sideways earlier on Friday as investor caution prevailed ahead of the non-farm payrolls data due for release later in the day. In other news, the Central Bank of Romania held the key policy rate at the current record low level of 1.75% at its MPC meeting earlier today and cut the minimum reserve requirement ratio on foreign exchange-denominated liabilities of credit institutions to 8% from 10%.

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