WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Global equity markets extended recent gains on increased risk appetite on Monday, following US President Donald Trump’s recent declaration about a “phenomenal tax plan” in the next few weeks. Donald Trump’s meeting with the Japanese Prime Minister Shinzo Abe during the latter’s two-day US visit late last week also had an impact. The improved tone in global markets dented the safe-haven appeal of major government bonds, with the 10-yr Treasury yield rising to a one-week high of 2.43% in European trade and the 10-yr Bund yield hitting a multi-session high 0.34%. In FX markets, the US dollar strengthened against its major currency peers, with the DXY dollar index rising to a three-week high of 101.02 in Asian trade on Monday, following cumulative gains of roughly 1.0% last week. Dented by prevailing European political woes, the EUR/USD slipped near Friday’s three week low of 1.0608, while the USD/JPY rose to a two-week high of 114.17 in late Asian trade. Looking at this week’s calendar, Fed Chair Janet Yellen’s semi-annual testimony to Congress on Tuesday and Wednesday takes centre stage.
GREECE: In a meeting in Brussels on Friday, the institutions asked from the Greek Government the legislation of measures of €3.6 bn or 2% of GDP for 2018 and 2019 that will be activated if and only if the country will fail to meet the 3.5% primary surplus target for the said period. The EC Commissioner for Economic and Financial Affairs Pierre Moscovici is expected in Athens on Wednesday in an effort to reach an agreement with the Greek government.
SOUTH EASTERN EUROPE
BULGARIA: The domestic stock market treaded water last week, with the benchmark SOFIX index closing modestly higher on a weekly basis to end at 604.47 points on Friday. Meanwhile, both the local and Eurobond markets remained quiet.
ROMANIA: Romanian assets staged a relief rally last week after the government announced its intention to repeal controversial changes to the criminal offenses code.
SERBIA: The EUR/RSD remained range bound last week, with any up-move attempts above 124.00 being capped by renewed Central Bank intervention in the FX markets.
CESEE MARKETS: Emerging market stock markets kicked off the week on a mostly positive footing, extending their recent gains amid improved risk appetite. In FX markets, gains in currencies were capped as the US dollar retained a firm tone. Meanwhile, in the CESEE local debt markets government bonds were mostly weaker earlier today.
Viewers can log herebelow and read the full report: Daily Overview February 13 2017