WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Fixed-income safe havens remained under pressure in European trade on Wednesday weighed down by the improved tone of global equity markets. The 10-yr Bund yield rose to its highest level since late March, with the majority of periphery-core spreads tighter along the curve. Italy was among the main underperformers as market focus shifts away from France and moves to Italy ahead of the April 30th leadership elections of the ruling Democratic Party (PD), which have the potential to influence the timing of the next general elections. In FX markets, improved market sentiment weighed on the JPY. All eyes today are on the US administration’s tax reform plan.
GREECE: The institutions’ (EC/ESM/ECB/IMF) mission has resumed negotiations with the Greek government on the basis of the drafts of the Memorandum of Understanding (MoU), the technical MoU, the Memorandum of Economic and Financial Policies (MEFP) and the technical MEFP. In an interview yesterday the Greek PM Alexis Tsipras broadly defended the agreement that is currently being negotiated with the official lenders in the context of the 2nd programme review but argued that if the institutions do not keep their commitment for medium-term debt relief, then the Greek government reserves the right to not implement the measures that the agreement foresees for 2019 and 2020. He also appeared confident that the 2nd programme review will be completed soon and that Greece will then be able to return to the financial markets.
SOUTH EASTERN EUROPE
CESEE MARKETS: Most CESEE assets lost some ground in early European trade today on profit taking as their recent rally ran out of steam.
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