WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Trailing gains in Wall Street overnight and in Asian bourses earlier on Tuesday, European stock markets moved cautiously higher after two UK opinion polls published on Monday showed the “Remain” campaign leading, while another indicated a slight lead for the “Leave” camp. Along these lines, the Sterling retained a firm tone earlier today, with the GBP/USD rising to a 5-month peak of 1.4781 in European trade. Looking into the remainder of the week, Fed Chair Yellen’s speech on monetary policy before the Senate Banking Committee lures market attention today, while the UK referendum on the country’s EU membership takes centre stage on Thursday. Spain’s repeat general elections on Sunday also feature high on the calendar in the coming days.
GREECE: The first loan sub-tranche of ca €7.5 bn from the second installment (total €10.3 bn) is expected to be disbursed to Greece later today. According to the MoU compliance report that was published last week €5.7 bn from the first sub-tranche will cover debt servicing needs until the end of August while the remaining €1.8 bn will be used for arrears clearance.
SOUTH EASTERN EUROPE
BULGARIA: The domestic equity market extended its recent uptrend over the last few days, favored by dividend news of large cap Chimimport AD. On the other hand, the local sovereign debt market was little changed over the last week or so, while yields on Eurobonds increased for paper of longer maturity.
SERBIA: The dinar gained some traction last week, with the EUR/RSD trimming some of its recent gains. In other news, the Public Debt Administration sold €75mn yesterday worth of 53-week EUR-denominated bills. Pressured by heavy demand, the average accepted yield dropped to 0.85%, from 0.89% scored at a recent auction of same maturity paper. A busy week lies ahead in the domestic fixed income space.
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