Dr. Platon Monokroussos, Chief Market Economist, Deputy General Manager, Eurobank Ergasias S.A
HIGHLIGHTS
WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Major Asian bourses extended their October rally on Monday, on higher technology and basic materials shares, powered by a sharp rebound in commodity prices over the past two weeks. Elsewhere, the picture in European equity markets was rather mixed in early trade, following a 6-day rising streak with cumulative gains of 4.7%. In FX markets, the US dollar lost ground against its major currency peers as expectations for a fed funds rate hike by the end of 2015 have faded on weak US employment data. Today Atlanta Fed President Dennis Lockhart, Chicago Fed President Charles Evans, and Fed Governor Lael Brainard speak on the US economic outlook and policy. On the data front, consumer price inflation data for the US and the Eurozone due later in the week will likely be closely scrutinized by market participants.
GREECE: The consumer price index (CPI) continued its declining path in September 2015. That was the 31st consecutive month (approximately 2.5 years) of disinflationary pressures. More specifically, CPI stood at -1.72%YoY in September 2015 (-0.79%YoY in HICP terms) vs. -1.46%YoY in August 2015 (-0.39%YoY in HICP terms). Elsewhere, after decreasing on an annual basis for three consecutive months (average yoy% equal to -3.56%), the production index in industry (IPI) increased 4.51%YoY in August 2015.
SOUTH EASTERN EUROPE
ROMANIA: In FX markets, the EUR/RON remained bound within a very tight trading range between 4.4100/210 last week. Meanwhile, short-term money market rates started to fall on the back of improving market liquidity and RON-denominated government bonds continued to rally.
SERBIA: The EUR/RSD closed near 119.80, little changed on a weekly basis on Friday, having pulled back from a high of 120.30/50 achieved earlier in the week.
CESEE MARKETS: Emerging stock markets kicked off the week on a positive footing, with most indices moving broadly higher earlier on Monday, extending last week’s hefty gains on speculation about the prospect of potential new economic-stimulus measures from Chinese authorities. A rally in commodity-related shares in view of a rebound in respective prices also favoured. Elsewhere, CESEE bourses were treading water in early trade today, while regional currencies and government bonds stood broadly weaker at the time of writing. Looking into this week, a monetary policy meeting in Serbia on Wednesday takes centre stage in the region.
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Daily Overview October 12 2015
