WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: According to the Catalan government, in Sunday’s referendum that was marred by clashes between police and voters, around two million Catalans representing 42.3% of eligible voters cast a vote with 90% voting in favour of a declaration of independence. According to some press reports, the head of the Catalan regional government left the door open to a potential declaration of independence once the local parliament approves the vote. In FX markets, Catalonia uncertainty weighed on the EUR while the USD was firmer across the board on newswires suggesting that Donald Trump is expected to make a decision regarding the next Fed Chair in the next two to three weeks and has met with former Fed Governor Kevin Warsh who is widely regarded as erring towards more hawkishness. Looking at this week’s calendar, key releases include Friday’s US non-farm payrolls for August, which are expected to be distorted by the impact of hurricanes Irma and Maria.
GREECE: The preliminary draft budget is expected to be tabled to Parliament today and according to press reports, GDP growth projections for 2017 and 2018 will be kept at the same level with the Medium Term Fiscal Strategy (MTFS) voted in May 2017, namely at +1.8% and +2.4% respectively. The Governor of the Bank of Greece Yiannis Stournaras, argued in an interview that the conduct of the stress tests for Greek banks earlier in 2018 than initially planned is positive as it will allow for the results to be released before the end of the economic adjustment programme in August 2018 and appeared confident about the state of Greek banks.
SOUTH EASTERN EUROPE
BULGARIA: Bucking the negative trend in emerging market assets, the local equity market firmed last week, with the main SOFIX index registering an advance of 1.4%. Separately, the Bulgarian sovereign debt yield curve experienced a volatile week, while Eurobond markets ended little changed.
SERBIA: Appreciation pressures on the dinar resurfaced anew last week after the EUR/RSD failed to move above levels around 119.60.
Viewers can log herebelow and read the full report: Daily Overview October 2 2017