WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Taking their cue from firmer Asian bourses, major European equity markets were modestly firmer in early trade on Tuesday on improved optimism about the growth prospects of the US economy. The US’ ISM manufacturing index moved in September above the boom-or-bust level of 50.0 prompting a hawkish shift in short-term Fed rate hike expectations and pushing the USD higher across the board. The USD’s gains were more pronounced against the GBP amid worries over a hard Brexit scenario.
GREECE: The draft Budget 2017 that was tabled to the Hellenic Parliament yesterday foresees real GDP growth at +2.7% and a primary surplus of 1.8% slightly higher than the programme target of 1.75%. Private consumption is envisaged to rebound to 1.8% in 2017 while public consumption will continue to contract albeit at a slower pace of -0.3% in 2017. Investment will perform strongly with expected growth 9.1% while exports will rebound with 5.3% growth and imports will grow by 3.3% as a result of the further relaxation of capital controls. The unemployment rate is penciled at 22.4% in 2017.
SOUTH EASTERN EUROPE
CESEE MARKETS: Emerging market assets were mixed earlier on Tuesday, after data released yesterday from the US added to optimism of improving economic growth prospects but also backed the case for a Fed rate hike this year.