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Daily Overview of Global Markets & the SEE Region (Friday, 21 June, 2019)
HIGHLIGHTS
WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Weighed down by renewed geopolitical tensions, the majority of Asian bourses ended in red territory today and major European equity markets opened lower, giving back some of their post-Fed gains. On the flipside, increased risk aversion along with the recent shift of both the ECB and the Fed to a more dovish stance, allowed fixed income markets to retain a firm tone. In FX markets, the USD continued to face selling pressure today as the more dovish tone the Fed adopted at this week’s meeting, reinforced market expectations for lower interest rates in the coming months. In the final ballot of Conservative MPs for the party leadership yesterday, pro-Brexit Boris Johnson and Jeremy Hunt emerged as the only two candidates left in the race to replace outgoing PM Theresa May. The around 160,000 Conservative party members will determine the winner in a postal ballot on a “one member one vote” basis, with the result expected to be announced in the week commencing 22 July. Looking at the remainder of the day, preliminary euro area PMIs for June is today’s highlight.
GREECE: According to the Bank of Greece, in April 2019 the current account recorded a deficit of €1.4 billion, down by €85 million YoY, due to an improvement in the goods and services balances, which was partly offset by the deterioration in the primary and secondary income accounts. In the January-April 2019 period, the current account showed a deficit of €5.1 billion, up by €335 million YoY. This development is mainly attributed to the deterioration of the secondary income account.
SOUTH EASTERN EUROPE
CESEE MACRO & MARKET DEVELOPMENTS: This week was broadly filled with Current Account data for April for many CESEE countries. In Bulgaria, the current account posted EUR 149.2mn surplus in April compared to a EUR 78.4mn deficit in the same month of the previous year. In Serbia, the CA deficit widened by 18.3% YoY to EUR 1.1bn in January-April. For both countries, timid growth in the euro area emerges as a pivotal factor for the evolution of the current account throughout 2019.
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