WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Wall Street firmed a tad overnight capitalizing on a stronger-than-expected Markit services PMI index for May. Another focus for the market yesterday was US President Donald Trump’s first full budget plan envisioning a $3.6 trillion cut in government spending over the next decade. Reversing earlier losses after Moody’s cut China’s sovereign credit rating to A1 from Aa3, the majority of equity indices in Asia ended in positive territory on Wednesday. In FX markets, the EUR/USD traded around 1.1191/92 in European trade at the time of writing, pulling away from yesterday’s 6-1/2 month high of 1.1268. Elsewhere, higher equity prices weighted on major bond markets. Market focus centres on the FOMC minutes from the meeting on May 3rd.
GREECE: According to press reports, in an effort to bridge the differences between Germany and the IMF on the debt relief issue a compromise proposal was submitted at the May 22nd Eurogroup that was rejected by the Greek side. In reaction to the lack of any definite outcomes with respect to the completion of the 2nd programme review, the debt relief measures and the disbursement of the next loan tranche at Monday’s Eurogroup, Greek government bond yields moved higher.
SOUTH EASTERN EUROPE
CESEE MARKETS: CESEE assets were mixed earlier on Wednesday, lacking direction in the absence of any major triggers.
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