WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Market attention is focused on the outcome of the FOMC policy meeting. The release of the official statement is due at 18:00GMT with a press conference with Chairman Janet Yellen to follow half an hour later. Following a string of upbeat non-farm payrolls reports over the last few months, the majority of market participants expect the FOMC to drop the “patient” guidance from its post-meeting policy statement and the Chairman to highlight that the Central Bank’s monetary policy path will be data dependent.
GREECE: Declan Costello, the European Commission representative in the institutions’ technical team, reportedly sent a letter to the Greek side asking them not to proceed with the parliamentary vote of the bills related to the implementation of: (i) certain measures for addressing the domestic humanitarian crisis; and (ii) a new instalment scheme for overdue tax payments and social security contributions. As per the same reports, he argued that these bills are not compatible with the February 20 Eurogroup agreement.
CYPRUS: Five non-executive members of the Board of Directors of the Central Bank reportedly highlighted, in a joint emailed statement on Tuesday, the urgent need to take steps in order to restore the institution’s credibility “necessary for the reconstruction process of the country’s economy”.
SOUTH EASTERN EUROPE
BULGARIA: The current account deficit narrowed by 90%YoY to €43.8mn in January, equivalent to 0.1%-of-projected-GDP.
ROMANIA: Speaking to foreign media reporters on Tuesday, Prime Minister Victor Ponta left the door open for tax cuts as early as this year, but highlighted that any such measures will be in line with maintaining the IMF-backed 2015 budget deficit target of 1.8% of GDP.
SERBIA: Serbia’s trade deficit narrowed modestly by 2.1% to €268.9mn on an annual basis in January.
CESEE MARKETS: Emerging stock markets extended this week’s gains on Tuesday after downbeat macroeconomic data from the US mitigated expectations about an inception of a Fed rate-tightening cycle sooner than expected. Hope for further stimulus from China also provided support. Separately, most CESEE currencies weakened yesterday.