WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Wall St closed in the red for a sixth consecutive session overnight moving to its lowest levels since July, on growing uncertainty about the result of next week’s US presidential elections. Mirroring the negative momentum in Wall Street, the VIX volatility index rose to a two month high above 20% y-day, while most Asian equity indices fell to seven-week lows on Wednesday. In FX markets, risk-off sentiment favored the safe-haven JPY, while the US dollar extended its losses against its major currency peers. On the flipside, the Mexican peso fell against the US dollar to almost a one-month low, given Donald Trump’s promise to build a wall along the US border with Mexico. Market focus today is on the FOMC monetary policy meeting which concludes later in the day, while on the data front US ADP employment report and Euro area PMI manufacturing for October are also expected to lure market attention.
GREECE: In cooperation with the institutions the Greek government is reportedly putting forward a series of incentives, such as lotteries and tax credits, in order to promote electronic payments and the voluntary disclosure of undeclared income. According to ESM Managing Director Klaus Regling, the ESM’s proposal for the short-term debt relief measures will be made before year end and Greece may be able to return to the financial markets in 2017, conditional on its sticking to the agreed reforms. The Ministry of Finance is reportedly working on the reform of welfare benefits based on the World Bank Review with the aim to secure the funds for the promised Social Solidarity Allowance, which constitutes a sticking point in the negotiations with official lenders.
SOUTH EASTERN EUROPE
SERBIA: NBS unexpectedly revised the inflation target of 2017 from 4% +/-1.5% to 3%+/-1.5% yesterday.
Viewers can log herebelow and read the full report: Daily Overview November 2 2016