WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: US Treasuries retained a firm tone on Friday supported by lingering market uncertainty about the timing Donald Trump’s administration will enact the planned comprehensive tax reform and its potential impact on the domestic economy. Uncertainty regarding the timing of the next Fed rate hike and the pace of rate tightening ahead, also has an impact. Supported by mounting euro area political jitters, German Bunds were also firmer in European trade, continuing to shrug off a bulk of positive euro area macro data released over the last few weeks. In FX markets, the USD remained under pressure.
GREECE: The Greek PM Alexis Tsipras briefed the Parliament today on the latest developments of the 2nd programme review and the outcome of the 20 February Eurogroup. He emphasized the importance of a framework agreement at the latest Eurogroup, which allowed the return of the technical staff to Athens and the acknowledgment by the institutions that there needs to be a policy shift away from austerity and towards growth enhancing reforms. He reiterated the view that the final mix of measures – i.e. both those proposed by the institutions and the Greek government – will have zero fiscal impact, explaining that for every one euro of burdensome measures equivalent offsetting measures will be adopted.
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