WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Major US stock indices eased modestly overnight on weaker oil prices and lower financials ahead of major banks’ earnings releases on Friday. In China, major equity indices closed marginally in the red, shrugging off better-than-expected data in the industrial sector. In FX markets, the US dollar fell for a second consecutive day, retreating from a multi-year peak at the beginning of the year, amid market anxiety ahead of US President-elect Donald Trump’s first news conference on Wednesday. Against this background, the EUR/USD recorded a 10-day peak of 1.0627 earlier in the day, pulling further away from last week’s 14-year low of 1.0340. Elsewhere, the GBP/USD hit a new 10-week trough of 1.2108 amid heightened worries over a “hard’ Brexit following British Prime Minister Theresa May’s comments on Sunday regarding her government’s Brexit plan. Increased uncertainty over Brexit and ahead of President-elect Donald Trump’s press conference enhanced the JPY’s safe-haven appeal, with the USD/JPY hovering slightly above 116.00 at the time of writing, having retreated from Monday’s 117.52 multi-session high.
GREECE: In the following days, the Greek Finance Minister Euclid Tsakalotos is scheduled to meet his French counterpart Michel Sapin and the European Commissioner for Economic Affairs, Pierre Moscovici, in order to prepare the ground for the January 12 Euroworking Group (EWG) and the resumption of official negotiations in the context of the 2nd programme review. According to press reports the agenda for the upcoming EWG includes the official initiation for the implementation of the short-term debt relief measures and the assessment of the status of the pending prior actions for the 2nd programme review. The economic sentiment indicator (ESI) increased in December 2016 both in monthly (+2.2 units) and annual terms (+7.0 units) coming in at 94.6 units, a 21 month high.
SOUTH EASTERN EUROPE
ROMANIA: The trade deficit came in at €866mn in November 2016, bringing the 11-month shortfall to €8.77bn. This marks a near 22%YoY widening from a deficit registered in January-November a year earlier. Meanwhile, labor market conditions continued to improve, with the rate of unemployment falling to 5.7% in November, from 5.8% in October and coming in against 6.6% in November 2015.
CESEE MARKETS: The majority of emerging market assets moved modestly higher earlier on Tuesday, breaking a 2-session losing streak. However, the Turkish lira remained under pressure falling to new record lows against the USD and the euro.
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