WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Wall Street edged up overnight, with the S&P 500 index jumping 1.5% to a two-month high of 2, 023.86 points, while 10yr US Treasury yields rose by 5bps to 2.02% on improved risk sentiment. This performance was exacerbated by better-than-expected US inflation and jobless claims data released yesterday. Mirroring the positive tone in Wall Street, major Asian bourses closed in the black on Friday, while in Europe, most equity indices opened higher. In FX markets, the US dollar rebounded from Thursday’s near two-month low, while the EUR/USD was trading close to 1.1377/78 at the time of writing after hitting a 7-week peak close to 1.1500 at some point yesterday. ECB Ewald Nowotny’s comments, which raised expectations for further ECB monetary easing in the coming months, weighed on the common currency. On the US data front, industrial production for September and University of Michigan consumer sentiment for October are expected to take centre stage today, while, in the euro area, the final estimate for September headline and core HICP is expected to lure investors’ attention.
GREECE: After a two-day parliamentary debate, the Hellenic Parliament is scheduled to vote late today on a multi-bill bill incorporating the legislation needed for the implementation of the prior actions required for the release of the first installment, amounting to €2bn, out of the outstanding €3bn sub-tranche of the first loan disbursement. On the data front, according to the preliminary State Budget Execution data for the January – September 2015 period, the budget balance recorded a ca €1.9bn deficit, improved relative to the respective 2015 Budget target (deficit at ca €1.4bn) but on the back of a significant shortfall in ordinary budget net revenue by ca €4.6bn (or -12.5%) relative to the respective 2015 Budget and the similar underperformance of ordinary budget expenditure by ca €3.1bn (or -8.4%) relative to the respective 2015 Budget.
SOUTH EASTERN EUROPE
CESEE MARKETS: Emerging stock markets moved modestly higher in early European trade on Friday, receiving support from upbeat US macro data released yesterday. In the FX markets, CESEE currencies stood broadly weaker in early European trade. Separately, CESEE local currency denominated government bonds were mixed earlier on Friday.
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