WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Major currency pairs continued to move within tight ranges in European trade on Thursday with GBP luring market attention ahead of the simultaneous publication later today of the BoE’s May Inflation Report, the MPC policy decision and the minutes of the monetary policy meeting. These will be followed by a press conference by BoE Governor Mark Carney. In FX markets, NZD was among the main underperformers after RBNZ stayed put on interest rates and kept a neutral basis at its monetary policy meeting earlier today, defying expectations for a shift toward a modestly hawkish stance.
GREECE: In its 2017 Spring Forecasts released today, the European Commission revised downwards its 2017 GDP growth forecast for Greece, to 2.1% YoY from 2.7% YoY previously (2017 Winter Forecasts). Private consumption is expected to be the main growth driver in 2017 supported by the decrease in the unemployment rate which is forecast at 22.8%. The Public Debt Management Agency (PDMA) successfully sold on Wednesday €1.138bn of three-month T-bills to refinance a maturing issue. The three-month paper was sold at an average accepted yield of 2.70%, unchanged compared to that recorded at the last auction of the same paper which was held in April. The bid-to-cover ratio came in at 1.61, higher than 1.30 in the previous auction, thanks to foreign investors’ hefty demand.
SOUTH EASTERN EUROPE
CESEE MARKETS: The majority of emerging market assets extended this week’s gains favored by a rebound in commodity prices.
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