Dr. Platon Chief Market Economist, Deputy General Manager, Eurobank Ergasias S.A.,
HIGHLIGHTS
WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: USD remained under pressure amid heightened market uncertainty over the US administration’s ability to implement key campaign promises including healthcare and tax reform. A downward reassessment in short-term Fed rate hike expectations following the more dovish than expected tone of US Fed Chair Janet Yellen at last week’s semi-annual testimony and disappointing US June inflation and retail sales data, also continued to weigh on market sentiment towards USD. Turning to core government bonds, yields remained off recent multi-month highs. Data wise, today we expect US housing starts and building permits for June though they are unlikely to be a game-changer for markets ahead of Thursday’s ECB monetary policy meeting.
GREECE: According to Bloomberg, Greece’s return to financial markets which was said to have been planned for this week, is being postponed because the IMF has set a ceiling to the amount of debt that Greece may hold in order for the Fund to participate in Greece’s programme. European Commission officials have reportedly commented that a successful completion of the 3rd Economic Adjustment Programme – due to expire in August 2018 – would require more than one bond issuance by the Greek government in order for the country to be able to build up a buffer of €9 billion which is to come from the ESM loan, the containment of public expenditure and tapping the markets. The Greek government spokesperson Dimitris Tzanakopoulos claims that the country will tap the markets when it estimates that it is in the best possible position with the lowest possible risk.
SOUTH EASTERN EUROPE
CESEE MARKETS: Emerging stock markets mostly retained a firm tone earlier on Wednesday, but currencies gave up some of their recent gains on profit taking which comes on the heels of their recent rally.
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