Dr. Platon Chief Market Economist, Deputy General Manager, Eurobank Ergasias S.A.,
HIGHLIGHTS
WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: US core PCE price –the Fed’s preferred inflation measure index– rose by a higher than expected 0.3%mom in January, the biggest increase in four years, supporting market expectations for a near-term Fed rate hike. Fed Funds futures are currently assigning a probability around 86% for a 25bps rate hike at the next FOMC monetary policy meeting on March 14-15 compared to around 50% earlier this week. In reaction to increased market expectations for a Fed rate hike in the imminent future, US Treasuries came under renewed pressure while the USD extended recent gains.
GREECE: Deliberations with the institutions continue in Athens and according to press reports, the mission heads will remain until next Tuesday or Wednesday while the 9 March Euroworking Group (EWG) will decide the course of action from then on. Differences remain but the Greek government claims that a staff level agreement by the 20 March Eurogroup is possible. The issues on the agenda today are the legal framework for the out-of-court workout as well as the Social Work programmes for the unemployed.
SOUTH EASTERN EUROPE
CESEE MARKETS: CESEE financial markets were mixed in morning trade on Thursday, with increased expectations for a Fed rate hike this month weighing on riskier assets.
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