Dr. Platon Monokroussos, Chief Market Economist, Deputy General Manager, Eurobank Ergasias S.A
HIGHLIGHTS
WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: The majority of Asian bourses edged lower on Monday –the first trading session this month- on profit taking, following their best monthly performance in October since May 2009. Elsewhere, most of European equity indices were weaker in early trade today, following a flurry of mixed corporate earnings results and soft Chinese manufacturing surveys. In FX markets, the DXY dollar index was trading 0.2% lower at 96.795 in early European trade at the time of writing, ahead of the US nonfarm payroll report due on Friday. Subdued US inflation pressures also weighed on the US dollar. This week, the BoE’s monetary policy meeting on Thursday and Friday’s US non-farm payrolls data take centre stage. Last but not least, PMI data releases in the US and in Europe also lure market attention today.
GREECE: The ECB released on Saturday, October 31 the results of a comprehensive assessment conducted on the four systemic Greek banks, Alpha Bank, Eurobank, National Bank of Greece and Piraeus Bank. The said assessment, comprised an asset quality review (AQR) and a forward-looking stress test, revealed a total capital shortfall of €4.4bn and €14.4bn under the baseline and the adverse scenarios, respectively.
SOUTH EASTERN EUROPE
SERBIA: In FX markets, the euro rallied against the dinar last week on increased local demand and some profit taking from closing bond positions. On the data front, real GDP grew by 2.0%YoY in Q3 2015, marking its 2nd consecutive quarter of positive annual growth rate following five successive quarters in contraction.
CESEE MARKETS: Emerging stock markets were treading water in early European trade on Monday, with most indices standing in a marginally positive territory at the time of writing, amid mounting China-related jitters. Turkey’s main BIST 100 index rallied strongly registering a near 6% surge compared to Friday’s settlement, after AKP’s decisive win on Sunday’s repeat general elections. In view of the aforementioned developments, the Turkish lira rallied nearly 6% to a 3-month peak of 2.7540/USD in Asian trade. Looking into this week, Romania’s and Poland’s MPC meetings take centre stage this week, where both Central Banks are expected to stay put on their monetary policies.
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Daily Overview November 2 2015
