WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Market focus is on the FOMC monetary policy meeting which is scheduled to conclude later in the day. Market participants expect the Central Bank to stay put on its monetary policy after lifting the Fed Funds Rate just a month ago for the first time in near ten years. With no post-meeting press conference scheduled, investors are expected to scrutinize closely the accompanying statement.
GREECE: Speaking in Parliament yesterday on the planned overhaul of the social security pension system, Prime Minister Alexis Tsipras insisted that “the system is not sustainable” adding though that, based on the government’s plan, there will be no cuts in existing main pensions. On his part, Kyriakos Mitsotakis, the newly elected President of the main opposition party New Democracy, set out alternative proposals such as the streamlining of the system into three funds (rather than one proposed by the SYRIZA/ANEL collation government), the implementation of the zero deficit clause in supplementary pensions and the crackdown on undeclared labor.
SOUTH EASTERN EUROPE
CYPRUS: On January 27th, the IMF board approved the 9th review of the Cypriot Economic Adjustment Programme which enabled access to an additional amount of €126.3mn.
CESEE MARKETS: Emerging stock markets moved broadly higher in European trade on Wednesday as bargain hunting emerged following a negative start into the year. Hopes for further monetary stimulus by the Bank of Japan and the ECB in the near future also favoured risk appetite. In the CESEE region, bourses stood in a modestly positive territory at the time of writing, while currencies and local currency government bonds were mixed.