Dr. Platon Monokroussos, Chief Market Economist, Deputy General Manager, Eurobank Ergasias S.A
HIGHLIGHTS
WORLD ECONOMIC & MARKET DEVELOPMENTS
GREECE: The negotiations between Greece and its official creditors (i.e. EC, ECB, ESM and IMF) on a 3rd bailout programme, according to press reports, are making progress. The EU Economic and Financial Committee will reportedly hold a teleconference today to examine the draft agreement. During the weekend the Greek government will provide its feedback on this draft so that the final document will be ready in due time for the Greek Parliament to ratify by 13 August both the agreement and a set of prior actions required for the first loan tranche to be released. According to data released today by the Hellenic Statistical Authority, the Harmonized Index of Consumer Prices (HICP) in July 2015 decreased by 1.3%YoY and the annual average rate of change of the HICP was -1.6%. The Consumer Price Index (CPI) in July 2015 decreased by 2.2%YoY and the annual rates of change of the CPI was -1.9%.
SOUTH EASTERN EUROPE
CYPRUS: Deflation intensified in July, so that consumer prices came at -3%YoY in July down from -2.4%YoY in June and only -0.6% YoY in July 2014.
ROMANIA: The NBR Governor Mr. Isarescu presented yesterday the new inflation report that incorporates the impact of the 2016 draft Fiscal Code and all envisaged tax cuts on consumer price developments. NBR downgraded its year end inflation forecast to -0.3% in 2015 down from 0.2% and 0.7% in 2016 up from 0.5% in the previous report.
CESEE MARKETS: On Friday morning, financial markets were in anticipation of the US labor data to be released later today. The US payrolls report will fuel further market talk about a prospective Federal Reserve rate hike in September.
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