WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Long-dated German government bond yields moved lower and the EUR weakened across the board following comments by ECB Chief Economist Peter Praet’s comments that the Central Bank is ready to expand its stimulus measures, if needed, to ensure that inflation will return to the Central Bank’s target of “below but close to 2%”over the medium-term.
GREECE: SYRIZA leader Alexis Tsipras was sworn in as Prime Minister yesterday while the new cabinet is reportedly expected to be officially announced later today or tomorrow, at the latest. In other news, the Euro Working Group reportedly convenes on Thursday, September 24, ahead of the upcoming Eurogroup scheduled for October 5 where the identification of the prior actions required to be fulfilled by the Greek side for the release of the outstanding €3bn sub-tranche of the first loan disbursement will likely be an issue of discussions.
SOUTH EASTERN EUROPE
ROMANIA: The finance ministry sold on Monday RON 198.4mn (~€44.9mn) of 10-year T-bonds, slightly below than the RON 200mn amount initially planned. The average accepted yield came in at 3.75%, above 3.20% achieved at a prior tender of 2025 paper held in April, primarily reflecting the recent turmoil in global markets.
SERBIA: Prime Minister Aleksandar Vucic reportedly said earlier in the week that he anticipates real GDP growth to come in at 2% in 2016, from 1.0% expected this year, expressing belief for a further pick up to 3.0% in 2017. He added that the general government deficit is seen at 3.0-3.5% of GDP in 2015, nearly half of the 5.9% of GDP target for the year.
CESEE MARKETS: Emerging stock markets broadly fell earlier on Tuesday amid mounting worries over global growth prospects after the Fed held off incepting its looming rate-hiking cycle last week citing concerns about the latest global economic and financial developments. Meanwhile, CESEE currencies were flat to firmer in early European trade and government bonds were mixed. Fed Chair Yellen’s speech and monetary policy meetings in Turkey and Hungary take centre stage today.
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