HIGHLIGHTS
WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: The majority of global equity markets were weaker early on Wednesday pressured by market concerns about US Q3 corporate earnings results. Sluggish export-related data from Japan also weighed. In addition to the above, market anxiety ahead of tomorrow’s ECB monetary policy meeting also had an impact. In FX markets, the JPY moved lower weighed down by disappointing Japanese data, while the EUR/USD was little changed as investors eagerly await tomorrow’s ECB monetary policy meeting.
GREECE: The Euro Working Group (EWG) that was scheduled to hold a teleconference today (Wednesday October 21st) to decide on the release the next ESM loan disbursement to Greece (€2bn), has reportedly been cancelled. As a reminder, the Hellenic Parliament approved late last week a multi-bill containing the relevant legislation for the implementation of around 15 prior actions attached to the next ESM loan disbursement, out of as many as 49 officially endorsed by the October 5 Eurogroup. Note that fulfilment of the outstanding prior actions reportedly requires the issuance of a number of ministerial decrees and circulars.
SOUTH EASTERN EUROPE
ROMANIA: In the wake of his meeting with an IMF mission yesterday, President Klaus Ioannis reportedly urged the government to try to maintain the budget deficit “under control” in order to ensure macroeconomic stability and sustainable economic growth.
SERBIA: The Ministry of Finance sold at an auction on Tuesday ca RSD 14bn (~€116.9mn) of the RSD 20bn (~€167.0mn) planned amount in 5-year Treasury bonds at an average accepted yield of 6.5%, well below 10.8% achieved at a prior auction of similar maturity paper held in August last year.
CESEE MARKETS: Most emerging stock markets stood in a modestly negative territory in early European trade on Wednesday, weighed down by falling tech shares and a retreat in Chinese equity markets as their recent recovery appeared to have been overstretched. Caution also prevailed ahead of the ECB meeting later in the week, while downbeat corporate earnings in Europe also had an impact on investor sentiment. In line with waning risk appetite, CESEE currencies broadly weakened earlier today. Today’s focus in the CESEE region is on Turkey’s Central Bank meeting.
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Daily Overview October 21 2015
