Dr. Platon Monokroussos, Chief Market Economist, Deputy General Manager, Eurobank Ergasias S.A
HIGHLIGHTS
WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Mirroring the negative tone in Asia, European bourses were weaker in early trade on Monday amid investors’ concerns that this week’s FOMC policy meeting is likely to add to the view that the timing of the first rate hike has come closer. The Fed is unlikely to embark on a rate tightening cycle at this week’s meeting, as this will not be followed by a press conference at which the Central Bank would have the chance to explain its decision. However, a rate hike in September, cannot be ruled out entirely, provided that US data will not disappoint until then.
GREECE: Domestic authorities are reportedly expected to begin negotiations with the technical teams of the four institutions on a new 3-year ESM loan by Tuesday. As suggested earlier today by an unnamed finance ministry official, talks with the heads of official lenders’ negotiating teams, initially expected to commence on Monday, are likely to begin “with a delay of a couple of days” for technical seasons.
CYPRUS: Official creditors completed on a staff level on Friday, the 7th review of Cyprus’s Economic Adjustment Programme.
SOUTH EASTERN EUROPE
BULGARIA: Local stock indices closed the week with modest gains, while trade volumes remained thin due to the summer doldrums.
ROMANIA: The consolidated general government surplus came in at RON4.2bn or 0.6% of projected GDP (on a cash basis) in H1-2015 vs. a RON3.5bn deficit (0.5% of GDP) in the same period last year.
SERBIA: In FX markets, the EUR/RSD moved modestly higher last week, ending not far from a multi-session peak near 120.20/40, remaining though within its recent trading range of 120.00-121.00.
CESEE MARKETS: Emerging stock markets closed broadly lower on Friday on the back of revived global growth concerns. Against this backdrop, CESEE currencies and government bonds ended broadly weaker in view of deteriorating risk sentiment.
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