WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Mirroring the uptrend in the US equity market, most European bourses rebounded on Monday, after their worst week in about almost four months. In FX markets, the US dollar rose against its major currency peers for the second consecutive session, as better-than-expected US labor market data reinforced expectations for a fed funds rate hike at next week’s FOMC meeting. On the data front, focus this week is on the euro area Q3 GDP final estimate due on Tuesday, including the composition of spending flows. In the US, jobless claims on Thursday and retail sales, producer prices for November and University of Michigan consumer sentiment for December (preliminary estimate) on Friday are also expected to lure market attention. Separately, Swiss National Bank and Bank of England interest rate decisions on Thursday will probably be closely scrutinized by market participants.
GREECE: On Friday, December 4th, the Bank of Greece submitted its Interim Report on Monetary Policy 2015 to the Speaker of the Greek Parliament. On Sunday, December 6th, the 2016 Budget passed through Parliament with 153 in favour votes from the SYRIZA-ANEL governing coalition, whereas 145 MPs voted against. According to press reports, on Tuesday, December 8th, the Greek government will commence a new meeting with the representatives of EC/ECB/ESM/IMF in order to complete the second set of 13 prior actions.
SOUTH EASTERN EUROPE
BULGARIA: On the data front, the final Q3 real GDP growth estimate (sa) came in line with the flash reading of 2.9%YoY and vs. an upwardly revised 2.6%YoY in Q2.
ROMANIA: The final estimate of the Statistical Service on the Q3 real GDP sa reading confirmed the flash estimate of 3.6%YoY compared to 3.8%YoY in Q2.
SERBIA: The EUR/RSD held above 121.00 and even climbed to a 10-month high of 121.40/60 at one point last week. However, new Central Bank interventions in the FX markets in order to halt the pair’s upside momentum held the cross below 121.50, with sales of €40mn last week.
CESEE MARKETS: Emerging markets closed broadly lower last week after the ECB’s decision for further monetary easing fell short of market expectations and the US non-farm payrolls report surprised to the upside adding to the view that the Fed will render in December its first rate hike since 2006. Looking into this week, Q3 real GDP from Turkey, November CPI from Hungary, Romania and Serbia, as well as the MPC meeting in the latter where the Central Bank is broadly anticipated to stay put on its monetary policy, take centre stage in the CESEE region.
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