Daily Overview of Global Markets & the SEE Region (Monday, July 31, 2017)

Dr. Platon Chief Market Economist, Deputy General Manager, Eurobank Ergasias S.A.,

HIGHLIGHTS

WORLD ECONOMIC & MARKET DEVELOPMENTS

GLOBAL MARKETS: The majority of global equity indices traded higher on Monday, shrugging off North Korea’s latest missile test late on Friday and the US response that followed on Sunday flying two supersonic bombers over the Korean Peninsula. In FX markets, the DXY dollar index fell 0.6% on Friday after slightly softer than expected GDP and labour data. Trimming some losses on Monday morning, the DXY dollar index was trading around levels of 93.500 at the time of writing, within distance from Thursday’s 13-month low of 93.152, with political uncertainty continuing to weigh on the US dollar. Along these lines, the EUR/USD was hovering around 1.1732 in European trade on Monday, not far from a 2.5 year-high of 1.7777 hit on Thursday. Looking at this week’s calendar, the main focus is the US nonfarm payroll report for July on Friday, with the market discounting a monthly employment increase of ca. 180k from 222k in June.

GREECE: According to press reports, the Greek government considers as a potential starting point for the 3^rd programme review the informal Eurogroup of September 15 at Tallinn and expresses the intention to close this review as swiftly as possible so that it can proceed with further bond issuances in the first months of 2018. On the same wavelength, Greek FinMin Euclid Tskalotos stated in an interview yesterday that the implementation of the programme is the responsibility not only of the cabinet but also of the whole “political organisation” of SYRIZA, meaning party members and SYRIZA MPs alike.

SOUTH EASTERN EUROPE

CYPRUS: Moody’s upgraded the long-term sovereign rating of Cyprus by one notch to Ba3 with a positive outlook.

BULGARIA: Bulgarian equities and bond markets remained broadly unchanged in the past week.

SERBIA: The EURRSD remained bound within a 120.05 – 120.80 trading range in the past week.

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