WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Independent centrist Emmanuel Macron won the second round of French presidential elections on Sunday against far-right and Eurosceptic Front National’s candidate Marine le Pen by a material margin. In a knee-jerk reaction to the market friendly outcome, the EUR moved higher across the board, the FTSEurofirst 300 index hit a nine-month intraday high and the 10-yr Bund yield marked a 1 ½ month intraday peak. Looking at this week’s US calendar, focus is on inflation and retail sales data for April both due on Friday. Elsewhere, the European Commission is scheduled to publish its Spring Economic Forecast on Thursday while the BoE that convenes on the same day is expected to stay put on its monetary policy ahead of the June 8general elections.
GREECE: With respect to the 2nd review of Greece’s 3rd Economic Adjustment Programme, the focus is now on the potential debt relief framework which will open the way for the financial participation of the IMF in the programme. The main issues in the debt relief discussion are: 1) the size and the duration of the primary surplus target that Greece will need to attain in the post-programme period, 2) the debt relief framework, and 3) whether the “if needed” clause regarding the implementation of the aforementioned framework will be maintained in the global agreement. The multi-bill which will contain the bulk of the measures and counter-measures in the context of the 2nd programme review is expected to be voted by 17th May.
SOUTH EASTERN EUROPE
BULGARIA: Bulgarian equities moved north last week following the release of Q1 2018 positive earnings reports. Meanwhile, the local sovereign debt market remained pretty much quiet. Eurobonds, on the other hand, gained some 5-7 bps in the long-end of the curve over last week.
SERBIA: The EUR/RSD held steady just above 123.00 during the whole of last week, remaining bound within a tight range of 123.05/25-123.15/35 against a backdrop of very low trading volumes.
Viewers can log herebelow and read the full report: