WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Wall Street rallied yesterday following Fed Dudley’s comments that escalating global uncertainties have weakened the chances for raising US interest rates in September, while durable goods orders surpassed market expectations. Trailing overnight gains on Wall Street, Asian and European equity indices edged higher on Thursday amid improved global risk sentiment. In FX markets, the US dollar strengthened against its major currency peers on Thursday, while gains in global equity markets dented the safe-haven appeal of the JPY. On the data front, focus today is on the second reading of US Q2 GDP growth, which is expected to be upwardly revised from a first estimate of 2.3%QoQ saar.
GREECE: The President of the Hellenic Republic, in line with the Constitution of Greece, is reportedly expected to assign to the head of the Supreme Administrative Court to form a caretaker cabinet later today that is anticipated to be sworn in on Friday. As things stand at this point, the main scenario is that snap elections will likely be held on September 20. In other news, according to the final Central Government (CG) Budget Execution data for the January – July 2015 period, the budget balance recorded a ca €0.8bn deficit, slightly improved relative to the respective 2015 Budget target (deficit at ca €1.4bn). This came on the back of a significant shortfall in ordinary budget net revenue by ca €4.3bn (or -14.2%) relative to the respective 2015 Budget target and the similar underperformance of ordinary budget expenditure by ca €3.1bn (or -10.5%) relative to the respective 2015 Budget target.
SOUTH EASTERN EUROPE
ROMANIA: Prime Minister Victor Ponta reportedly approved on Wednesday a 25% increase in doctors’ and nurses’ wages, scheduled to come into effect on October 1st.
CESEE MARKETS: Taking their cue from the rally in Wall Street overnight and gains in major Asian bourses on Thursday, emerging stock markets moved higher earlier today on bargain hunting. In a similar mode, regional currencies andgovernment bonds recovered ground earlier today.
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