WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: As expected, the FOMC unanimously decided to stay put on interest rates at the two-day meeting that concluded late yesterday with the federal funds target range remaining at 1.00-1.25%. The parts of the accompanying statement relevant to policy guidance were left unchanged with the FOMC providing further support to market expectations for a 25bps rate hike in December. Market reaction to the FOMC monetary policy outcome was muted as focus is on the long-awaited release of the Republic House draft legislation on tax reform later today (around14:00GMT), originally planned to be unveiled yesterday. Moreover, market participants are eagerly awaiting the Fed Chair nominee by President Donald Trump (expected at around 20:00CET) with the latest press reports conveying that Fed Governor Jerome Powell will probably be Trump’s choice. Today we also expect the BoE monetary policy outcome, the minutes of the meeting, the November BoE Inflation Report and a press conference by BoE Governor Mark Carney. On the back of rising inflation and a drop in the unemployment rate to decade lows, the BoE is expected to hike the Bank Rate by 25bps to 0.50%. Focus will be whether the BoE signals that the rate hike will be the start of a gradual hiking cycle or simply a one-off raise.
GREECE: According to press reports, the Greek PM Alexis Tsipras is committed to closing the 3rd programme review on time and to this end all competent Ministers are urged to implement the agreed prior actions in a timely and comprehensive manner. The Markit PMI Manufacturing stood at 52.1 in October, slightly lower from 52.8 in September but still above the no-change threshold, signaling the fifth consecutive improvement in Greek manufacturing sector conditions. According to FEIR, the decrease of the Economic Sentiment Indicator from 100.6 in September to 98.3 in October can be attributed to more moderate expectations regarding the economy in Q4 as well as increased tax burdens for households and companies towards the end of the year that further mitigate confidence.
SOUTH EASTERN EUROPE
CESEE MARKETS: Emerging market assets traded mixed earlier on Thursday ahead of the imminent nomination of the new Fed Chair by the US President and the release of the draft legislation on tax reform by the US House of Representatives. Key labour market data releases from the US today and tomorrow also remain in the forefront.
Viewers can log herebelow and read the full report: Daily Overview November 2 2017