WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: The majority of Asian bourses moved higher today but gains were limited amid heightened market concerns about a more severe than previously expected slowdown in China. In FX markets, the USD firmed against most safe-haven currencies including the JPY. On the data front, focus today is on the 2nd estimate of Eurozone Q2 GDP.
GREECE: Former Prime Minister and SYRIZA leader Alexis Tsipras reiterated to reporters during an interview yesterday night that his goal is SYRIZA to secure an absolute parliamentary majority in the upcoming early election. However, he indicated that if no party gains an absolute majority, a coalition government should be formed quickly “because nobody will take the responsibility of leaving the country ungoverned”. A pre-election debate with the leaders of all political parties with parliamentary representation –aside from far-right Golden Dawn- will take place tomorrow evening. In other news, according to the General Government (GG) Budget Execution data for January to July 2015 arrears to third parties (outside the GG) increased by ca 64.3% compared to the end of December 2014 (from c. €3.0bn to c. €5.0bn).
SOUTH EASTERN EUROPE
ROMANIA: Net wages increased by 1.7%MoM in July, bringing the rate of annual rise to 7.6%. The latter reading marks a modest slowdown from a near 4-year high advance of 7.8%YoY registered in the prior month. In all, the data continues to confirm robust wage growth so far this year, which is supporting the view that private consumption remains the leading growth driver in the domestic economy.
CESEE MARKETS: CESEE stock markets were mixed in early European trade on Tuesday amid mounting global growth concerns and lingering uncertainty about the timing of the inception of the Fed’s rate-tightening cycle. Downbeat trade data released from China earlier today exacerbated concerns about the prospects of the world’s second largest economy. Investor caution also prevails ahead of next week’s FOMC meeting. In the FX markets, CESEE currencies were mixed, receiving though some support from a weaker US dollar against several major peers. In a similar vein, government bonds were mixed, with Turkish paper leading the way higher.
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