WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: All eyes are on the November 8th US Presidential election where American voters not only vote for the new US President but will also elect the entire House of Representatives and around a third of the Senate, the two congressional chambers of the federal government endowed with legislative powers. Market participants appear to have positioned over the last few weeks for a Clinton victory with a divided government. That said, alternative post-election scenarios such as Trump winning the presidency or a clean sweep outcome of executive and legislative branches by either party are expected to have significant market repercussions.
GREECE: The intention of a swift and successful completion of the 2nd programme review was at the centre of the cabinet reshuffle carried out by the Greek PM last Friday with the FinMin and the Alternate FinMin maintaining their positions as they are believed to have significantly contributed to the establishment of a good and fruitful collaboration with the institutions. In his speech to the new cabinet Alexis Tsipras stressed the need for the completion of the review before year end and urged its members to intensively work towards this goal. Nevertheless, the open prior actions are numerous and are further broken down into even more sub-actions many of which require legislative acts. Among the sticking issues are reportedly the 2017 Budget and the 2017-2020 fiscal strategy, the labour market reform and the privatisations programme.
SOUTH EASTERN EUROPE
BULGARIA: The domestic equity market ended last week in a positive territory extending its recent gains. Meanwhile, the domestic sovereign debt market trailed the turmoil in European markets. On the other hand, Eurobonds fared better ending little changed on a weekly basis as caution prevailed ahead of the presidential election on Sunday.
SERBIA: The EUR/RSD moved lower last week on obvious over-supply of euros in the domestic FX market, but the pair managed to recover later during the week after the Central Bank (NBS) intervened in order to halt the cross’s downside momentum. In other news, the Ministry of Finance issued just €23mn worth of a 2-year EUR-denominated new paper, out of the planned €100mn. The average accepted yield came in at 1.08%, just 1bp lower than what it was achieved at the last such auction in July.
Viewers can log herebelow and read the full report: Daily Overview November 7 2016