WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Major Asian equity indices bounced back snapping a two-session declining streak, while most European bourses opened significantly higher endeavoring a recovery from the hefty sell-off in the prior two sessions and shrugging off S&P’s and Fitch’s downgrade of the UK’s sovereign credit rating to AA (and negative outlook) from AAA and AA+, respectively. In FX markets, the British pound trimmed earlier losses, with the GBP/USD hovering around levels of 1.3329/30 in European trade at the time of writing from a 31-year low of 1.3121 hit in yesterday’s session. On the calendar today, the EU parliament votes on a resolution on the UK referendum while, later in the day, EU leaders in Brussels start a two-day summit to discuss the Brexit fallout. On the US macro front, the third estimate of Q1 GDP takes centre stage, while ECB President Mario Draghi is due to make an introductory speech at ECB Forum on Central Banking “The future of the international monetary and financial architecture” in Sintra, Portugal.
GREECE: According to press reports, EU officials urge the Greek government to swiftly proceed with the completion of the milestones attached to the second programme review, as foreseen in the updated Memorandum of Understanding. The target is to have the review completed by end of October 2016 and the next loan tranche disbursed during the first fortnight of November.
SOUTH EASTERN EUROPE
ROMANIA: The finance ministry sold on Monday a planned amount of RON 500mn of 3-year treasury bonds, at an average accepted yield of 1.90%.
CESEE MARKETS: Emerging market assets recovered some ground earlier on Tuesday, following a sharp sell-off in the previous two sessions.
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