WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Following new record highs in Wall Street overnight, Asian stocks ended higher on Tuesday supported by upbeat US non-farm payrolls data as well as market expectations for accommodative monetary policies from major central banks for longer. In FX markets, the JPY lost some ground pressured by improved market sentiment for riskier assets while the GBP strengthened on reduced UK political uncertainty. Focus today is on the Ecofin meeting where EU finance ministers will vote on the Commissions’ proposal for the launch of formal disciplinary procedures against Spain and Portugal.
GREECE: Speaking before the Standing Committee on Economic Affairs of the Hellenic Parliament, BoG Governor, Yannis Stournaras, pointed out that following the completion of the 1st programme review a number of important factors are now in place to help the Greek economy return to sustainable growth. These include improved liquidity following the disbursement of the second ESM loan tranche, the reinstatement of the waiver, the potential inclusion of Greek government bonds to the ECB’s Quantitative Easing programme by the end of 2016 and the dissolution of uncertainty.
SOUTH EASTERN EUROPE
ROMANIA: Inflation came in at -0.2% MoM/-0.7% YoY in June vs. +0.3% MoM/-3.5% YoY in May driven by the phasing out of last year’s food products VAT rate cut.
CESEE MARKETS: Emerging Market assets broadly firmed earlier on Tuesday on improved risk appetite. The MSCI Emerging Market index trailed gains in major global bourses, standing for the fourth session running in the black and firming to its highest level in almost three months in Asian trade. In FX markets, CESEE currencies also firmed, with the Turkish lira outperforming regional peers. In the sovereign debt markets, local currency denominated government bonds were a tad weaker possibly on profit taking.
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