WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: All eyes today are on the ECB monetary policy meeting where the Central Bank is expected to taper further, announcing a reduction to the monthly pace of asset purchases, probably to EUR 30bn from EUR 60bn currently accompanied with a 6-9 months extension of the programme (APP). However, with inflation showing no signs of convincing convergence towards the price stability target, the ECB will most probably add a dovish tone to the tapering announcement. In anticipation of further tapering, the 10-yr Bund yield eased back close to 0.48% today after failing to break above the technically important 0.50% threshold on Wednesday, suggesting that investors are probably positioned for a relatively dovish tapering announcement. In FX markets, the EUR was stronger rebounding to a multi-session peak of 118.35 against the USD. The ECB’s policy decision is due at 11:45GMT and ECB President Mario Draghi’s post-meeting press conference is scheduled for 12:30GMT.
GREECE: The collaboration between the Greek authorities and the institutions in the context of the 3rd programme review is reportedly smooth and productive as most of the legislative work has already been done and efforts are now directed towards implementation. The Ministry of Finance published yesterday the final State Budget Execution for January-September 2017. The State Budget balance for the January – September 2017 period registered a deficit of EUR0.4 billion, (versus a MTFS2018-21 targeted deficit of EUR0.3 billion for the respective period). The State Budget Primary Balance registered a surplus of EUR4.5 billion versus a MTFS2018-21 targeted surplus of EUR4.6 billion, (i.e. realisation was below target).
Viewers can log herebelow and read the full report: Daily Overview October 26 2017