WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: The USD remained under pressure in European trade on Tuesday as the less-hawkish-than-expected tone of last week’s FOMC monetary policy statement continued to have an impact. Meanwhile, market uncertainty over the US President Trump administration’s fiscal stimulus plan prevails as no details have been released so far with investors waiting for a detailed budget plan in mid-May. The EUR extended its recent gains against the USD favored by the publication of an opinion poll suggesting that centrist presidential candidate Emmanuel Macron was seen as the most convincing in a marathon election debate between France’s top five election contenders last night. GBP also gained after UK inflation data showed that headline rose to a higher than expected 2.3%YoY in February, moving above the BoE’s inflation target for the first time in nearly four years. Meanwhile, according to EU sources, UK Premier Theresa May has informed the European Council that she will trigger Article 50 on Wednesday, March 29.
GREECE: The Eurogroup than convened yesterday was debriefed by the institutions and the Greek authorities on the state of play of the ongoing 2nd review of Greece’s 3rd Economic Adjustment Programme. It was acknowledged that a lot of work has been done and progress made but some key issues remain. Therefore, it was agreed that talks will continue to intensify and to this end the Greek Ministers of Finance and Labour remained in Brussels to resolve the outstanding topics and reach with official lenders a full policy package agreement. With regard to the order of things ahead, Eurogroup President Jeroen Dijsselbloem stated that first there should be an agreement on a policy package including pension, tax and labour reform as well as a number of other issues and then the Eurogroup will work towards a political agreement which will also include the issues of the fiscal trajectory and debt.
SOUTH EASTERN EUROPE
CESEE MARKETS: Emerging market assets mostly retained a firm tone earlier on Tuesday as the post FOMC meeting and Dutch elections euphoria continued to have a positive impact on investor risk sentiment.
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