Dr. Platon Chief Market Economist, Deputy General Manager, Eurobank Ergasias S.A.,
HIGHLIGHTS
WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: The BoE surprised markets with two MPC members joining MPC Kristin Forbes, the most hawkish member so far, and voting all three in favor of a 25bps rate hike at this week’s monetary policy meeting. Reacting to the MPC minutes, GBP gained some ground and UK Gilts came under pressure. Elsewhere, USD retained a firm tone with the DXY index hitting a two week high. Looking at today’s calendar, focus is on US housing starts and building permits for May as well the UM’s consumer confidence for June.
GREECE: An agreement was achieved at the Eurogroup that convened on June 15th 2017. Firstly, there was a positive assessment regarding the fulfilment of the conditionality attached to the 2nd programme review. Secondly, with regard to debt sustainability, it was agreed, among others, that upon completion of the programme medium-term debt relief measures will be implemented “to the extent necessary” – versus “if necessary” that was stated in the May 2016 Eurogroup agreement – and within the framework outlined at the May 25th 2016 Eurogroup. Thirdly, the Eurogroup agreement opened the way for an Approval in Principle of a Standby Agreement by the IMF. Finally, the Eurogroup committed to providing support for Greece’s return to the markets through future disbursements that will be adequate not only for debt repayment and arrears clearance but also for building cash buffers that will boost investors’ confidence and facilitate access to the financial markets.
SOUTH EASTERN EUROPE
CESEE MARKETS: In Serbia, President Aleksandar Vucic nominated Ana Brnabic, who holds the state administration and local self-government portfolio, as his successor for the post of the Prime Minister. In Turkey, the Central Bank stayed put on its monetary policy at its MPC meeting yesterday, in line with market expectations, leaving all key interest rates unchanged.
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