WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Taking their lead from the positive tone in Wall Street overnight where the Dow Jones Industrial Average index moved above the 20,000 level for the first time ever, major Asian bourses rose on Thursday supported by solid US corporate earnings results and optimism over a major fiscal stimulus from US Donald Trump’s administration. Failing to capitalize on Wall Street’s positive tone, the USD remained under pressure amid worries over Donald Trump’s trade protectionism stance. According to the Italian Constitutional Court’s ruling on the electoral law for the lower house (Italicum), the majority premium for the party that comes first was upheld, provided that it gets at least 40% of the votes. However, it ruled against the second round ballot between the top-two parties to decide which will get such premium if no party secures 40% of the votes in the first round.
GREECE: The Eurogroup that is scheduled to convene today will discuss the progress achieved to date in the ongoing 2nd review of Greece’s 2rd Economic Adjustment Programme as well as the implementation of the short-term debt relief measures, following their official approval by the ESM and EFSF Boards earlier this week. According to a senior Eurozone official there is a good chance that the institutions will find common ground so that the review can be successfully concluded by end February. The Governor of the Bank of Greece Yiannis Stournaras reiterated the need for the review to close in order for the economy to recover and encouraged all sides involved to show more flexibility.
SOUTH EASTERN EUROPE
CESEE MARKETS: Emerging market assets continued to trade mixed earlier on Thursday as worries over US President Trump’s protectionist stance counterbalanced a weaker dollar and new record highs in Wall Street overnight. Against this backdrop, emerging stocks moved higher, while regional currencies and government bonds were mixed. Today’s CESEE calendar is relatively light. Focus on Friday turns to Fitch’s review on Turkey’s sovereign credit rating.
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