WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Oil prices remained under pressure on Monday following a string of weaker-than-expected US data late last week and news that Iranian sanctions were lifted on Saturday. Against this environment, major government bonds retained a firm tone while the JPY remained one of the main outperformers in FX markets. Looking at this week’s global calendar, the ECB monetary policy meeting on Thursday takes centre stage ahead of China’s activity data on Tuesday.
GREECE: According to some press reports, discussions in the context of the 1st programme review between the technical teams representing official creditors and Greek authorities reportedly commenced today. As per the same sources, talks focus mainly on the fulfilment of the agreed fiscal targets for fiscal years 2016, 2017, 2018 and the overhaul of the social security pension system which represent two of the key prior actions required to be fulfilled for the completion of the review. attached to the review./ According to preliminary figures on the execution of the State Budget on a modified cash basis, the State Budget Primary Balance amounted to a surplus of €2, 267mn against a primary surplus target of €3, 257mn and a surplus of €1, 872mn recorded in the same period a year earlier.
SOUTH EASTERN EUROPE
BULGARIA: The domestic stock market remained mostly in the red last week amid deteriorating risk sentiment globally. On the other hand, BGN denominated sovereign bonds were little changed on a weekly basis on Friday, while the Eurobonds yield curve undertook some steepening and adjustment to the upside.
ROMANIA: As this year’s global risk-off mood continued last week, the EUR/RON retained its recent uptrend. Meanwhile, the recent rally witnessed in RON government bonds continued last week.
SERBIA: In line with the weakening trend in regional currencies, the dinar came under renewed pressure last week. Further depreciation in the coming days is likely, especially after Prime Minister Aleksandar Vucic announced on Sunday his decision to call early national elections, in a move to strengthen his government’s mandate.
CESEE MARKETS: Emerging stock markets extended their recent losses on Monday on global growth concerns and further weakness in oil prices. Polish assets underperformed their regional peers after S&P unexpectedly cut Poland’s sovereign credit rating by 1-notch on Friday, to BBB+ with negative outlook citing concerns over the new government’s policies on the independence of the country’s key institutions.
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