WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Taking their cue from gains in Wall Street overnight, the majority of Asian stock markets closed in the black on Friday thanks to upbeat US macroeconomic data. Nonetheless, European stock markets treaded water in morning trade as caution prevailed ahead of Fed Chair Janet Yellen’s speech at the Central Bank’s annual Jackson Hole symposium later today, which is expected to be closely scrutinized by market participants for any hints over the FOMC’s monetary policy deliberations ahead. Another speech by European Central Bank President Mario Draghi at Jackson Hole also lures attention on Friday. In the FX markets, the dollar took a breather earlier today, with its recent rally running out of steam ahead of the Fed Chair’s speech.
According to final State Budget execution data on a modified cash basis for the first seven months of 2014, the primary central government balance recorded a surplus of €2.3bn, in line with preliminary estimates, compared to a surplus target of €800mn for that period. Meanwhile, the overall central government budget ran a deficit of €1.7bn in January-July, outperforming a deficit target of €3.4bn and a €1.9bn shortfall posted over the same period of 2013.
SOUTH EASTERN EUROPE
SERBIA: Ongoing depreciating pressures on the dinar prompted renewed Central Bank intervention on Thursday.
ROMANIA: The leu hit a 3-week high of 4.3990 against the euro yesterday.
BULGARIA: Bulgaria’s budget deficit widened to BGN 1.147bn (or ca 1.4% of projected GDP) over the first seven months of the year, from BGN 167mn over the same period a year earlier and is anticipated to exceed the full-year target of 1.8%-of-GDP as soon as August.
CESEE MARKETS: CESEE stock markets were mixed earlier today, currencies were little changed, ahead of the Fed Chair’s speech. Newly elected Turkish President Tayyip Erdogan nominated Foreign Minister Ahmet Davutoglu as his replacement for the post of Prime Minister on Thursday.
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