Daily Overview of Global Markets & the SEE Region (Thursday, February 01, 2018)

Banking, Finance, Reports, Shipfinance — By on February 1, 2018 at 12:19 PM

HIGHLIGHTS

WORLD ECONOMIC & MARKET DEVELOPMENTS

GLOBAL MARKETS: In line with expectations, the FOMC kept its key interest rates unchanged at this week’s two-day monetary policy meeting that concluded late on Wednesday. There were no updated economic projections or post-meeting press conference. However, the overall tone of the accompanying statement was more hawkish compared to that in the previous meeting. In reaction to the more hawkish tone of the FOMC statement, government bond yields across the US and the euro area hit fresh highs. In FX markets, the USD remained under pressure failing to capitalize on the FOMC hawkish tone pressed by lingering US structural and political woes as well as market perception of monetary tightening in other parts of the word outside the US. With the FOMC meeting out of the way, focus today is on US ISM manufacturing index for January ahead of the key non-farm payrolls report on Friday.

GREECE: The Greek Finance Minister Euclid Tsakalotos said in an interview in Reuters that he expects that Greece will make a clean break with official lenders when the international bailout expires in August 2018 and that it has no reason to seek a precautionary credit line. He added that in the coming months Greece will be preparing its own post-bailout plan with an emphasis on reforms, social policies and growth. The adverse scenario of the 2018 stress test for Greece, foresees a cumulative reduction of GDP in the area of -3.2% for the period 2018-2020, a cumulative drop in residential and real estate prices of -16.6% and -16.6% respectively and a cumulative reduction in HICP of -2.8%. Unemployment is projected at 20.6%, 20% and 19.1% f0r 2018, 2019 and 2020 respectively. According to IHS Markit, the Manufacturing PMI for Greece in January 2018 reached its highest level since October 20o7 at 55.2 up from 53.1 in December 2017 with the overall expansion driven by a steep rise in new orders from both domestic and foreign markets.

SOUTH EASTERN EUROPE

ROMANIA: Romania reportedly opened earlier on Thrusday the books on a dual-tranche euro bond, of securities maturing in 12 and 20 years .

SERBIA: Serbia’s Q4 GDP growth vindicated market expectations coming in at 2.5%YoY from 2.1%YoY in the prior quarter, bringing the full-year reading to 1.8%.

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