WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Following China’s government decision to abandon its large-scale share purchases to boost the equity market, Chinese bourses lost ground on Monday paring cumulative gains of ca 10% registered in the two prior sessions. Elsewhere, the picture in European equity markets was rather mixed in early trade ahead of key US macroeconomic data that could potentially give clues on the timing of the first US interest rate increase since 2006. In FX markets, the US dollar started the week under pressure amid increased uncertainty about global monetary policy direction and renewed signs of weakness in global equity markets on Monday. Focus this week is on the US and China PMI manufacturing due on Tuesday, as well as on the US nonfarm payrolls and unemployment rate releases on Friday, expected to underpin the ongoing improvement in labor market conditions. Market participants will closely scrutinize the ECB’s policy meeting on Thursday for any hints on a possible further monetary policy easing ahead amid the recent global financial turmoil, although no imminent monetary policy action is expected.
GREECE: A Presidential Degree dissolving Parliament and officially calling for national elections was issued on Friday, August 28. As per the said decree, general elections will take place on September 20th with the new Parliament is scheduled to convene on October 1st. On the data front, provisional national accounts data for the second quarter of the year which released on Friday surprised positively showing an upward revision in real GDP growth to 0.9%/+1.6% QoQ/YoY, from an initial reported estimate of +0.8%/+1.4% QoQ/YoY primarily driven by resilient consumer spending. Elsewhere, the Economic Sentiment Indicator for Greece deteriorated in August for the sixth month in a row coming in at 75.2, its lowest level since March 2009.
SOUTH EASTERN EUROPE
BULGARIA: The Ministry of Finance released last week the much-anticipated September debt auction calendar last week, envisioning T-Bond tenders for paper of 3, 5 and 10-year maturities with a total nominal value of BGN 300mn (~€153mn).
ROMANIA: The finance ministry reportedly plans to sell RON3.5bn (~€0.79bn) of RON-denominated government bills and bonds in September, with another RON 345mn (~€77.94mn) penciled in for non-competitive offers.
SERBIA: The EUR/RSD closed little changed last week, after renewed Central Bank interventions in the FX markets.
CESEE MARKETS: CESEE assets were mixed in early European trade on Monday as China-related worries remained in the forefront, while investor caution prevailed ahead of a string of key macroeconomic data releases and events in the region as well as globally are anticipated in the coming days.
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