WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Wall Street moved broadly sideways overnight, as falling crude oil prices led to a sharp energy shares selloff. Major Asian equity indices retreated from an almost one-year high on Tuesday, dragged down by Japanese shares ahead of the expected government’s announcement of a JPY28trn stimulus package. In FX markets, the US dollar weakened against its major currency peers following weaker than expected manufacturing data and overshadowing Fed officials’ comments that left the door open for an imminent rate hike. Against this background, the EUR/USD was rising above 1.12 in European trade at the time of writing, its highest level since the UK referendum on June 23. In the rates market, US Treasuries eased on Tuesday with the 10-yr yield rising to 1.54% in early European trade, still below its 1-month high of 1.6266% reached on July 21. On the US macro data front, June personal income and PCE deflator and July auto sales will probably lure market attention today.
GREECE: Klaus Regling, the Managing Director of the ESM, stated in an interview in the newspaper “The Korea Herald” that since last August the Greek government and the institutions are in a cooperative mode and expressed confidence that Greece will successfully exit the programme in about two years provided that it sticks to the reform agenda.
SOUTH EASTERN EUROPE
ROMANIA: The Ministry of Finance sold RON 721.2mn in 11Y T-bonds at an average yield of 3.42%.
SERBIA: According to the flash estimate, GDP growth expanded by +1.8% YoY in Q2-2016 down from +3.5% YoY in Q1-2016.
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