Dr. Platon Monokroussos, Chief Market Economist, Deputy General Manager, Eurobank Ergasias S.A
HIGHLIGHTS
WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: In a speech delivered yesterday, Fed Chairperson Janet Yellen adopted a largely upbeat assessment of the US economy. Yet, in contrast to her speech on May 27th, she did not provide any hints about the timing of the next rate increase. All in all, the Fed Chairperson suggested that a rate move at next week’s meeting is off the table but the prospect of a July rate hike cannot be ruled out completely.
GREECE: The Eurogroup Working Group decided at its meeting yesterday to offer the Greek government additional time up to mid-day today to fulfill the remaining open issues attached to the review before it gives the green light for the release of the next loan tranche amounting to €7.5bn. According to unnamed Greek government officials, the next tranche is expected to arrive into State coffers by the end of June.
SOUTH EASTERN EUROPE
ROMANIA:Â The revised estimate of the Statistical Service on the seasonally adjusted Q1-2016 GDP reading confirmed the flash estimate of +1.6% QoQ/+4.2% YoY.
CESEE MARKETS: Emerging stock markets extended their recent rally earlier on Tuesday, thanks to scaled back expectations for a Fed rate hike in the coming months. A rise in commodity prices also appeared to provide support. In the FX markets, most regional currencies held onto their recent gains. In the local rates markets, the Romanian finance ministry sold a planned amount of RON 500mn (~€110.9mn) of 2.25% February 2020 T-Bonds at an auction on Monday. The average accepted yield came in at 2.25%, almost in line with that achieved (2.26%) at a prior tender of same maturity paper held in early May.
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