WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: In FX markets, the EUR regained some ground against the USD hovering around 1.1300 at the time of writing in European trade, having recovered from Monday’s 1.1080 intraday low supported by firmer-than-expected Germany’s industrial production data for April.. In the absence of major data releases today, focus is on Greek developments ahead of Thursday’s key US retail sales for May.
GREECE: Addressing a news conference y-day, Greece’s government spokesman Gabriel Sakellaridis ruled out the prospect of snap elections adding that the government is not seeking an extension of its loan arrangement when it expires at the end of June. The above comments followed the release of a report in international press y-day suggesting that Greece and its official creditors are discussing a further extension of the country’s program through March 2016. Meanwhile, local press reports suggested that the Greek government was expected to submit late y-day counter proposals to the Institutions envisaging among others higher VAT rates compared to those penciled in the proposals submitted earlier this month as well as a higher percentage of health contributions for pensioners.
SOUTH EASTERN EUROPE
BULGARIA: According to preliminary data the seasonally adjusted Industrial Production Index advanced by 0.2%MoM in April, bringing the annual rate of increase to 1.5% (working day adjusted).
ROMANIA: Net wages rose by 1.5%MoM in April, bringing the annual rate of increase to 7.0%YoY, vs. a 7.2%YoY rise in the prior month.
CESEE MARKETS: Emerging stock markets kicked off the week on a negative footing, extending their recent downtrend on Monday, after US non-farm payrolls data for May, released late last week, surprised positively supporting the view for a potential inception of the Fed’s rate-hiking cycle sooner than previously expected. Idiosyncratic factors, particularly in the political landscape in several countries in the region, also exerted a negative impact, as did concerns over the Greek issue and higher US Treasury and Bund yields. Along similar lines, CESEE currencies broadly recoiled yesterday with the Turkish lira underperforming its regional peers. In the local rates markets, Romania’s finance ministry rejected all bids in yesterday’s 2021 T-Bonds auction as domestic political jitters amid corruption allegations against Prime Minister Viktor Ponta weighed on investor demand, while yields have lately moved higher in line with the rise in Bunds and USTs.
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