WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Speaking in the press conference that followed the conclusion of y-day’s ECB policy meeting, President Mario Draghi made clear that speculation about earlier-than-planned tapering is premature. He also said that, the risks surrounding the euro area’s economic outlook have become more balanced and economic recovery is expected to broaden and strengthen gradually in the period ahead. Reacting to the ECB President’s comments, the majority of EMU periphery sovereign debt spreads narrowed and the EUR edged higher in European trade on Thursday.
GREECE: S&P downgraded y-day Greece’s long- and short-term severing credit rating by one notch to CCC+/C from B-/B, respectively. The accompanying statement read that Greece’s solvency hinges increasingly on favorable business, financial and economic conditions which have worsened due to the uncertainty stemming from the prolonged negotiations between the Greek government and the official lenders./ Responding to a relevant question in the Q&A session, ECB President Mario Draghi reiterated that a precondition for the Central Bank to reinstate a Greek collateral waiver is the establishment of a “credible perspective” for a successful conclusion of Greece’s review under the current arrangements.
SOUTH EASTERN EUROPE
BULGARIA & ROMANIA: According to a statement released in its website on Wednesday, the Bulgarian government approved a draft Protocol of Intention between the Ministry of Tourism and the Ministry of Economy, Trade, and Tourism of Romania.
SERBIA: According to media reports, pensioners rallied on Wednesday against pension cuts aimed at curbing the country’s fiscal deficit in line with the conditions set out under the country’s €1bn 3-year IMF Stand-By Arrangement.
CESEE MARKETS: Most emerging stock markets closed lower on Wednesday amid lingering concerns about the sustainability of the global economic recovery. Meanwhile, CESEE currencies and government bonds broadly weakened in view of waning risk appetite.
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