Daily Overview of Global Markets & the SEE Region (Tuesday, May 22, 2018)

Banking, Finance, Reports, Shipfinance — By on May 22, 2018 at 11:32 AM

HIGHLIGHTS

WORLD ECONOMIC & MARKET DEVELOPMENTS

GLOBAL MARKETS: Mirroring the positive sentiment in Wall Street overnight, major European equity markets opened higher on Tuesday, benefitting from easing trade tensions between the US and China that agreed to have further talks to boost US agricultural and energy commodity exports to China. The prospect of an apparent resolution to the US-China trade frictions has further added to the US dollar’s strength, with the DXY dollar index surging to a five-month high of 94.058 on Monday before retreating to levels around 93.400 in European trade on Tuesday. Amid increased political uncertainty in Italy, Italian 10-yr government bond yield hit a 14-month high of 2.42% in early European trade on Tuesday, with the respective spread over the 10-yr Bund surging to roughly 190 bps, the widest since June 2017. In commodity markets, Brent crude oil prices gained some ground heading towards a 31/2 year high near 80$/barrel hit last week, amid market concerns about falling Venezuelan crude output, following US President Trump’s ordered sanctions on debt owed to Venezuela.

GREECE: According to press reports, the staff level agreement reached on Saturday between the Greek authorities and the institutions foresees that 78 prior actions of the 4th programme review – out of the 88 in total – must be completed now while the remaining 10 will reportedly be transferred to the post-programme framework. The Greek government reportedly intends to submit to Parliament a multi-bill on 5 June and have it voted on 9 June and at the same time adopt any required secondary legislation by 15 June in order to reach a comprehensive agreement on all open topics – conditionality, debt relief and post-programme framework – at the 21 June Eurogroup.

SOUTH EASTERN EUROPE

CESEE MARKETS: Emerging market assets traded on a firmer footing in European trade on Tuesday as the US dollar pulled back from yesterday’s 5-month highs, while US Treasuries remained below last week’s peak.

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