WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: All eyes this week are on the ECB monetary policy meeting on Thursday. In an effort to address deflation risks and boost euro area economic activity, the Central Bank is widely expected to adopt a sovereign-bond buying program of ca €600bn while the prospect of President Mario Draghi leaving the door open for additional bond purchases, if needed, cannot be ruled out. Against this background, major European bourses opened higher on Monday while the EUR remained under pressure across the board.
GREECE:. Fitch lowered Greece’s sovereign credit outlook to negative from stable citing rising political uncertainty ahead of the upcoming January 25 general election. However, Fitch kept the country’s sovereign credit rating unchanged at “B”, in line with that of S&P and two notches below Moodys. On the data front, provisional data by the Hellenic Statistical Authority showed that total construction activity (private and public), calculated on the basis of the number of issued building permits in the country, amounted to 1, 269, marking a 19% decline compared to the same month a year earlier.
SOUTH EASTERN EUROPE
SERBIA: S&Ps affirmed on Friday its long- and short-term foreign and local currency sovereign credit ratings on the Republic of Serbia at ‘BB-/B’ and announced its decision to remove them from CreditWatch negative, maintaining though its negative outlook.
ROMANIA: The EUR/RON closed little changed at 4.5010 on Friday, with a move towards a new multi-month peak at 4.5135 earlier in the session appearing to have been capped by potential Central Bank intervention.
BULGARIA: The current account surplus decreased by 69%YoY to €371.1mn over the first eleven months of 2014, corresponding to 0.9% of GDP.
CESEE MARKETS: The majority of CESEE stock markets kicked off the week on a positive footing ahead of the ECB meeting on Thursday. In FX markets, CESEE currencies were mixed, with the Turkish lira leading the losers’ pack.
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