Dr. Platon Monokroussos, Chief Market Economist, Deputy General Manager, Eurobank Ergasias S.A
HIGHLIGHTS
WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Tracking losses in Wall Street overnight, the majority of Asian and European stock markets moved broadly lower earlier on Tuesdayamid heightened worries over China’s growth prospects, persisting uncertainty on the Greek issue and increased volatility in a number of major sovereign bond markets. With the May 11 Eurogroup now out of the way, market focus turns to US April retail sales due on Wednesday which have the potential to affect the short-term outlook of the EUR/USD.
GREECE: According to the official statement issued after the conclusion of y-day’s Eurogroup, euro area finance ministers acknowledged the progress that has been achieved so far in official discussions between the Greek authorities and the institutions. Yet, as per the same statement, more time is required and more effort is needed for the two sides to bridge their differences on the outstanding issues so as a staff level agreement to be reached, a prerequisite for the resumption of official sector financing. In other news, Greece made y-day a c. €750mn amortization payment to the IMF, a day before it was due.
CYPRUS: According to preliminary estimates, Cyprus’s trade deficit shrank by 6.4%YoY to €168mn in March, pushing the Q1 2015 shortfall ca 20% narrower on an annual basis to €797mn, as growth of 45.5%YoY in exports over that period, significantly outpaced nearly flat growth in imports.
SOUTH EASTERN EUROPE
ROMANIA: The finance ministry sold on Monday RON 400mn worth of 3.25% January 17, 2018 T-Notes at an average accepted yield of 2.00%, a tad below a yield of 2.11% achieved at a prior auction of same maturity paper held in April.
SERBIA: Confounding our and market expectations for staying put on its monetary policy at its meeting on Monday, the National Bank of Serbia cut its key policy rate by 50bps for the second month running to a new record low of 6.50%. In other news, upon the conclusion of a 2-week visit to Serbia in the context of the first review under the country’s precautionary Stand-By Arrangement, the IMF said in a statement on Monday that the mission reached a staff-level agreement with domestic authorities.
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