WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: The US dollar continued its upward trend against its major currency peers while Treasury bond yields edged higher in early European trade on Thursday. Positive US economic data reinforced expectations for more US interest rate hikes and higher infrastructure spending by the US President-elect which in turn might give boost to inflationary pressures. Against this background, the DXY dollar index hit a fresh 13 ½ year high of 102.05 earlier today, recording more than 4.0% cumulative post-US election gain. In the sovereign bond market, the 2yr Treasury yield hit a six year high of 1.15% while the 10yr Treasury yield rose to a 16-month peak of 2.42%, taking the 10yr UST-Bund yield spread to a new high of 211bps, the widest since 1989.
GREECE: Addressing the Parliamentary Group of the SYRIZA party, PM Alexis Tsipras, argued that based on the progress of the 2nd programme review it is both realistic and absolutely necessary to reach a political agreement on the completion of the review at the December 5 Eurogroup adding that debt relief talks will commence then. With regard to the pending items for the 2nd review, according to local press, European Commission sources claim that Greece and the institutions are close to a comprehensive agreement, which will open the way for debt relief.
SOUTH EASTERN EUROPE
BULGARIA: In a statement released yesterday, Fitch assessed that the resignation of the Bulgarian government and the prospect of early elections early next year increase fiscal uncertainty for 2017.
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