Daily Overview of Global Markets & the SEE Region (Friday, September 15, 2017)

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

HIGHLIGHTS

WORLD ECONOMIC & MARKET DEVELOPMENTS

GLOBAL MARKETS: Major European equity indices opened lower on Friday, following a rather mixed picture in Asian equity markets, after North Korea fired off another missile that flew over Japan. Although the BoE kept the Official Bank Rate unchanged at 0.25%, it did highlight it might tighten monetary policy ‘over coming months’ if underlying inflation moves higher and the unemployment rate moves lower. Reacting to the above, the GBP/USD hit a fresh one-year high of 1.3450 while UK’s 10-yr gilt yield surged y-day to its highest level since early August at 1.23%. Elsewhere, the August US inflation report provided a first indication that the earlier decline in core prices may be due to idiosyncratic factors that may have started to fade. Along these lines, the USD/JPY hit a 40-day high of 111.04 y-day but soon gave up these gains to hover around 110.70 at the time of writing. In the rates market, the US 10-yr Treasury yield surged to a one-month high of 2.22% on firm CPI data, before retreating to levels around 2.18% after North Korea’s second missile launch over Japan.

GREECE: The Eurogroup that convenes later today will discuss the progress in the implementation of the 3rdEconomic Adjustment Programme and in particular the pending items from the 2nd programme review and plans related to the upcoming 3rd review of the programme. Meanwhile, talking to press yesterday the IMF spokesperson and Director of Communications Gerry Rice, reiterated that in order for the precautionary standby arrangement for Greece to move forward, more clarity is needed around debt relief as well as commitment by Greece to see the agreed reforms through within the set timetable. According to the preliminary State Budget Execution data for January – August 2017, the budget balance recorded a deficit of ca €1.27 bn, that is ca €0.04 bn above the respective Medium Term 2018-21 (MTFS) target (deficit €1.23 bn).

SOUTH EASTERN EUROPE

CESEE MARKETS: With the reaction to the new North Korea missile launch appearing to be rather limited, the majority of emerging market assets moved higher earlier on Friday.

Viewers can read herebelow the full report:  Daily Overview September 15 2017

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