DailyOverview of Global Markets & the SEE Region (Monday, February 12, 2018)

Banking, Finance, Markets, Reports, Shipfinance, Statistics, Stock Markets — By on February 12, 2018 at 12:45 AM

HIGHLIGHTS

WORLD ECONOMIC & MARKET DEVELOPMENTS

GLOBAL MARKETS: According to the US Committee for a Responsible Federal Budget, Friday’s two-year budget deal, which follows the sweeping overhaul of the US tax code in December, is projected to push the federal government deficit to levels above USD1trn in 2019. The prospect of more government borrowing for funding a widening fiscal deficit exerted renewed selling pressure on US Treasuries. Meanwhile, the DXY index was 0.3% lower on the day but 0.7% firmer on a weekly basis favored by the latest bout of increased risk aversion amid fears of accelerating US inflation. Looking at this week’s calendar, focus is on Wednesday’s US inflation data for January. Elsewhere, the White House will release President Trump’s long-awaited infrastructure plan later today.

GREECE: The EUR3 billion 7-year GGB issued last week at a yield of 3.50% was oversubscribed for a total value in excess of EUR 6 billion from around 210 accounts. The transaction enjoyed broad spread in terms of investors’ geographical origin and type. The Euroworking Group that convened on 8 February reportedly discussed the modus operandi of the task force that is mandated to work on the medium-term debt relief measures for Greece while the timetable foresees an in-principle agreement on the subject by end-March 2018. According to press reports, during that EWG no EU member state expressed any objections regarding either debt relief or linking debt – servicing to GDP growth. According to local media, the post-programme surveillance framework will have a four-year duration, up to 2022 when the obligation for a 3.5%-of-GDP primary surplus expires while the Greek Finance Minister Euclid Tsakalotos reportedly stated that it will include specific commitments for Greece but not the means to meet these commitments.

SOUTH EASTERN EUROPE

BULGARIA: The Bulgarian equity market followed the world-wide stocks sell off, while Eurobond and local-currency government bond yields rose.

SERBIA: The EUR/RSD ended last week at 118.42/62, slightly lower compared to prior Friday’s settlement amid increased euro supply from local corporate clients.

CESEE MARKETS: Emerging market assets kicked off the week on a stronger footing, recovering part of the recent hefty losses suffered amid increased concerns for a higher than expected increase in inflation that pushed core government bond yields higher and triggered a sell-off in global equity markets.

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Daily Overview February 12 2018

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