WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Market expectations that the ECB will probably adopt a government bond-buying program in the coming weeks/months in an effort to boost euro area economic activity and address deflation risks, continued to mount. Against this background, the EUR extended its recent losses in European trade on Monday, with the EUR/USD falling to 1.1880 at some point earlier in Asia, the lowest level since March 2006. Looking ahead, relative Eurozone/US growth differentials and perceived divergence in the Fed’s and the ECB’s monetary policy stance, point to a weaker EUR/USD in the coming weeks/months.
GREECE: Greece’s Manufacturing Purchasing Managers’ Index (PMI) came in at 49.4 in December, up from November’s 49.1, remaining though below the boom-or-bust level of 50.0 for the fourth straight month mainly due to lower new orders and stocks of inputs. In other news, Germany’s Vice Chancellor and Economy Minister Sigmar Gabriel was quoted as saying in a newspaper interview that the German government wants Greece to stay in the euro area and there are no contingency plans to the contrary.
SOUTH EASTERN EUROPE
CESEE MARKETS: Emerging stock markets kicked off the week on a negative footing, extending a 3-day losing streak amid mounting risk aversion, while a resumption in oil prices’ decline weighed on energy shares. Separately, CESEE currencies were mixed, while government bonds broadly firmed. In the CESEE space, this week’s focus is on Romania’s Central Bank monetary policy meeting on Wednesday, while, globally, Eurozone CPI data and US labour data for December take centre stage.
Viewers an log herebelow and read the full report: Dailyoverview January 5, 2015