Daily Overview of Global Markets & the SEE Region (Monday, September 25, 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: Angela Merkel won a fourth term as German chancellor in Sunday’s federal election, in line with expectations. Yet, Angela Markel’s CDU/CSU alliance secured just 33% of the vote, the second-lowest since 1948 and below c. 36% recent opinion polls suggested. The SDP took 20.5% , its worst performance ever with Martin Schultz announcing that his party will go into opposition, presumably in an attempt  to rebuild  its credibility. The so-called ‘Jamaica’ coalition seems to be the most likely scenario consisting of CDU/CSU, FDP and the Greens. In reaction to the German election outcome, the EUR came under some pressure and EMU sovereign debt spreads undertook some widening on the view that the FDP, a potential coalition partner in the new German government, is firmly against any further EU integration. Looking at this week’s calendar, focus is on a numerous Fed and ECB speakers including ECB President Mario Draghi on Monday and Fed Chair Janet Yellen on Tuesday. On the data front, inflation data from the euro area and the US both on Friday, lure market attention.

GREECE: The Eurogroup President Jeroen Dijsselbloem is expected to arrive in Athens today where, among others, he will discuss the post-programme regime for Greece, which will have to be agreed upfront between the institutions and the Greek authorities. On Greece’s public debt, Eurogroup President argued in an interview that as previously (May 2016) agreed, the matter will be discussed after the completion of the programme and, provided that it is deemed necessary and that Greece will have fulfilled its obligations, further debt relief measures will be adopted. On the privatisations front, the CEO of HCAP Rania Ekaterinari stated in an interview that the revenue targets from privatisations for 2017 and 2018 are in the area of EUR1.9billion and EUR2.5billion respectively. Meanwhile, the BoD of the HRADF decided in agreement with HELPE that two investment schemes are qualified to proceed to the next phase of the tender process for the acquisition of 66% of DESFA share capital.

SOUTH EASTERN EUROPE

BULGARIA: Bulgarian equities lacked direction last week, while the domestic sovereign debt yield curve experienced a drop directed by the 8 and 9 year tenors. Meanwhile, Eurobond yields were little changed.

SERBIA: The EUR/RSD moved modestly higher last week, assisted by new Central Bank intervention. The pair closed on Friday at 119.25/45, having pulled back from a three-year low of 118.75/95 hit a few sessions ago.

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Daily Overview September 25 2017

 

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