WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: The US’ May non-farm payrolls report disappointed prompting a dovish shift in short-term Fed rate hike expectations. US Treasury yields tested fresh multi-week lows and the USD moved lower across the board. With the non-farm payrolls report out of the way, all eyes are now on Fed Chairperson Janet Yellen who is scheduled to speak later in the day and is expected to reiterate the Central Bank’s gradual tightening bias.
GREECE: The Euroworking Group (EWG) is reportedly scheduled to convene later in the day via teleconference to assess the compliance report of the 1stprogramme review that was recently completed by official creditors. Upon approval, it is expected to give its consent for the release of the next ESM loan tranche to Greece amounting to €7.5bn.
SOUTH EASTERN EUROPE
BULGARIA: The domestic equity market closed broadly higher on a weekly basis on Friday, thanks to upbeat Q1 corporate earnings reports. The broader positive trend in emerging markets, thanks to scaled back expectations for imminent Fed rate hikes, also appeared to favor.
ROMANIA: The EUR/RON hovered around the upper bound of its recent trading range last week, while there was no material change in money market rates, as the market remains very liquid in RON. A combination of hawkish Fed comments and the publication of a relatively heavy issuance calendar for June put some pressure on long term yields in the first part of the week, but weak US data released later reversed the trend, with yields broadly ending flat.
SERBIA: The EUR/RSD rebounded strongly late last week, from a weekly low of 122.75/95 hit on Wednesday. On the fixed income side, the Public debt agency announced the T-bill/bond auction calendar for June, where the government will try to raise RSD 31.7bn and EUR275mn in six separate tenders.
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