Dr. Platon Monokroussos, Chief Market Economist, Deputy General Manager, Eurobank Ergasias S.A
HIGHLIGHTS
WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: The majority of Asian bourses weakened on Friday amid renewed concerns about the growth outlook of China. Meanwhile, prices of a wide range of commodities, including oil, remained in a downward trend pushing commodity-related currencies lower. The ongoing decline in commodity prices also took its toll on US long-dated with the 2/10-yr yield curve undertook some bullish flattening today.
GREECE: Greece is reportedly expected to submit today an official request to the IMF for its “full involvement in the monitoring and financing of the new programme”, a precondition set at the July 12th Euro Summit. The Greek government reportedly aims official discussions to have been concluded by August 12 so that there is enough time for the Eurogroup and the Parliaments of a number of EU countries to vote on the new bailout programme by August 18 and the next loan disbursement to arrive at the State’s coffers by August 20 when two GGBs mature of a total notional amount of €3.2bn. Separately, according to the final Central Government Budget Execution data for January – June 2015, the budget balance recorded a ca €1.4bn deficit, significantly improved relative to the respective 2015 Budget target (deficit of ca €4.6bn).
SOUTH EASTERN EUROPE
ROMANIA: The finance ministry sold on Thursday the planned RON300mn (equivalent to €67.9mn) amount in 4.75% June 2019 T-bonds at an average accepted yield of 2.46%, well below a yield of 2.78% achieved at a prior auction of the same issue held in mid-June.
SERBIA: According to finance ministry data released earlier in the week, the impressive improvement in fiscal performance so far this year continued in June, with the consolidated budget deficit narrowing by 69%YoY to RSD 35.3bn over the first half of 2015.
CESEE MARKETS: Taking their cue from losses in Wall Street overnight and in major Asian bourses on Friday, the majority of emerging stock markets moved broadly lower earlier today extending their recent downtrend on the back of revived global growth concerns. In FX markets, CESEE currencies were little changed in European trade after losing ground in the prior session. In the local rates markets, government bonds broadly weakened with Turkish paper broadly underperforming its regional peers amid domestic political uncertainty.
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