WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Wall Street closed in the black overnight while US 10yr Treasury yields rose as the Fed’s Beige Book, which contains a valuation of economic conditions from the 12 Federal Reserve districts, reported continued economic growth into the third quarter. Trailing overnight gains from Wall Street, most Asian equity indices closed higher. Elsewhere, major European bourses opened firmer on Thursday ahead of the ECB monetary policy meeting later in the day and the ensuing press conference. ECB President Mario Draghi is likely to adopt a more dovish tone compared to last month due to lingering concerns about China’s growth outlook and persisting subdued inflation pressures in the euro area.
GREECE: In a document submitted to the Dutch Parliament, Eurogroup President and Dutch Minister of Finance Jeroen Dijsselbloem reportedly argued that the upcoming Greek snap election will not delay the comprehensive assessment of Greek banks’ balance sheets and the recapitalization of the banking system which is expected to be completed by the end of this year.
SOUTH EASTERN EUROPE
SERBIA: The finance ministry sold on Wednesday RSD 9.45bn (~78.65mn) in 2-year T-bonds, at an average accepted yield of 6.8%, below 7.2% achieved at a prior auction of similar maturity paper held in May.
CESEE MARKETS: Trailing gains in Wall Street overnight as well as in major European bourses earlier today, CESEE stock markets moved broadly higher in European trade on Thursday ahead of the ECB meeting later on the day. In the external debt markets, Poland sold on Wednesday€1bn of EUR-denominated 10-year Eurobonds, which mature on September 9, 2025. Focus today is primarily in Romania, where the lower house of Parliament is expected to debate and vote on amendments of the fiscal code and the finance ministry plans to sell RON 400mn (~ €90.16mn) of January 2018 T-Notes.
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