WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Taking their cue from the improved tone in the majority of Asian bourses, major European equity markets opened higher on Friday following the positive reaction of Chinese stocks to the suspension of the circuit breaker system for the Chinese equity market. The People’s Bank of China also helped sooth markets by announcing a marginal strengthening of the yuan at the daily USD/CNY mid-point reference rate setting. The release of the US’ December non-farm payrolls report lures market attention today.
GREECE: In a press conference yesterday, Dutch finance minister and Eurogroup President Jeroen Dijsselbloem was quoted saying that the process for the completion of Greece’s 1st programme review will take months, not weeks. Meanwhile, as part of the planned pension system overhaul, the representatives of the country’s biggest employers’ associations reached an agreement with the Greek government yesterday for an increase in social security contributions as a means to avert a cut in existing pensions. On the data front, the Economic Sentiment Indicator for Greece improved in December coming in at a five-month high of 87.1 from November’s 86.5.
SOUTH EASTERN EUROPE
BULGARIA: The Economic Sentiment Indicator improved further, rising to 106.2 in December, hitting a new post-Lehman high and coming in against 105.7 in November.
ROMANIA: Romania’s FinMin sold at an auction on Thursday RON 333mn (~€73.6mn) of February 4.75% 2025 T-bonds, more than initially planned. On the data front, the December ESI Index surprised to the downside, declining further, by 1.3 points to 103.5.
CESEE MARKETS: The majority of emerging stock markets stood in the black in European trade on Friday led by a rebound in Asian shares after the Chinese government suspended a market circuit breaker system that was introduced on Monday and the Central Bank set a firmer yuan exchange rate. In a similar vein, regional currencies recovered ground earlier today thanks to somewhat improving risk sentiment. On the flipside, government bonds were flat to weaker in early European trade on Friday.
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