Dr. Platon Monokroussos, Chief Market Economist, Deputy General Manager, Eurobank Ergasias S.A
HIGHLIGHTS
WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Major European bourses were firmer, German Bund yields stood close to recent multi-year lows while the EUR remained under pressure across the board in European trade on Monday as the ECB’s expanded asset purchase programme, which was launched last week, continues to have an impact. Market focus this week is on the FOMC policy meeting (March 17-18).
GREECE: According to the latest (January-February 2015) data on the execution of the State Budget, the Central Government primary balance on a modified cash basis showed a surplus of €1.243bn less than the €1.411bn expected, mainly due to an under performance of the respective net revenue target set in the 2015 Budget.
CYPRUS: The Ministry of Finance announced on Friday a further relaxation of capital controls, which were imposed in March 2013 in order to safeguard the stability of the banking system.
SOUTH EASTERN EUROPE
BULGARIA: According to the latest NSI data released on Friday, deflation pressures in the domestic economy persisted in February as CPI declined for the 19th month running, marking a 0.5%YoY drop.
ROMANIA: The EUR/RON was little changed remaining bound within a tight range of 4.4315/4.4500 last week, while government bonds came under pressure over the last few days, in line with the recent sell-off witnessed in emerging markets on expectations that the Fed may embark on its rate-tightening cycle sooner than anticipated.
SERBIA: The EUR/RSD closed modestly lower on a weekly basis on Friday, standing near levels of 120.00, with further downside pressures mitigated by new NBS intervention in the FX markets.
CESEE MARKETS: Emerging market assets came under pressure last week as mounting speculation that the Fed may start hiking interest rates earlier than previously expected overshadowed the positive impact from the launch of the ECB’s QE programme.
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