WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: With market participants continuing to digest the unexpected hawkish surprise by the Fed at this week’s policy meeting to push higher the “dots” for 2017, the USD retained a firm tone in European trade on Friday and US Treasury yields remained in an upward trend with short-dated notes underperforming.
GREECE: The institutions reportedly submitted a report to the ESM’s Board of Directors with their preliminary assessment on the Greek government’s recent decision to utilize revenues of €617mn from this year’s fiscal over-performance to support 1.6mn low income pensioners in the form of a one-off provision. According to some press reports, the Euroworking Group will likely convene next week to discuss the implementation of the short-debt relief measures for Greece that were approved at the December 5th Eurogroup while a final decision is expected to be reached either at the next Eurogroup scheduled for January 26th 2017 or at an emergency meeting earlier. Meanwhile, the 300-seat Hellenic Parliament approved late on Thursday with a majority of 196 in favor votes the bill containing the required legislation for the implementation of the one-off provision to low income pensioners.
SOUTH EASTERN EUROPE
CESEE MARKETS: Following yesterday’s knee-jerk reaction to the Fed’s news, emerging market assets were little changed earlier on Friday. In other news, the Romanian finance ministry rejected yesterday all bids of a February 2019 T-bonds auction and Serbia raised RSD 14.25bn (~€115.6mn) of 3-year T-bonds at an average accepted yield of 4.74%.
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