Dr. Platon , Monokroussos, Chief Market Economist, Deputy General Manager, Eurobank Ergasias S.A.,
HIGHLIGHTS
WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Asian equity indices traded mixed on Monday retreating from last week’s multi-year highs, while oil prices surged to a more than two-year high. In an anti-corruption attempt, Saudi Arabia’s King Salman ordered on Saturday night to arrest senior members of the royal family, cabinet ministers, former top officials and investors including the world’s 50th richest person Prince Alwaleed bin Talal. In FX markets, the US dollar increased to its highest level in nearly eight months against the yen on Monday, after Friday’s US positive economic data enhanced expectations for a December fed funds rate hike and further tightening by the Fed in 2018, mirroring continued monetary policy divergence between the Fed and the Bank of Japan. Ahead of a thin data calendar in the post US payrolls week, focus will probably centre on US President Donald Trump’s Asian tour that started in Japan. Moreover, the House of Representatives is expected to vote on a final draft of the tax plan towards the end of the week, while the Senate will also release its own version of the tax plan.
GREECE: The Greek government reportedly plans the swap of 20 PSI bonds with maturities from 2023-2042 worth c. EUR 30 billion with 5 new bonds. Following that, in 2018 it plans 2 or 3 more bond issuances to secure funds in the area of EUR 6 billion by the end of the programme. These funds along with c. EUR 9 billion ESM funds will provide a cash buffer for the post-programme period, which will help keep interest rates at acceptable levels. Meanwhile, the post-programme regime will reportedly be stricter than that of Cyprus or Portugal and will involve gradual debt relief linked to the further implementation of reforms. Furthermore, Greece will be required to not reverse already implemented reforms including fiscal ones as well as those in other areas such as the labour market.
SOUTH EASTERN EUROPE
BULGARIA: Bulgarian equities reversed a 4-week losing streak to end in the black on a weekly basis on Friday. The majority of local-currency government bonds ended little changed, while Eurobonds. Last week Bulgarian treasury bonds were listed on the Bulgarian stock exchange in hopes of increasing liquidity, which is expected to lower bid-ask spreads on these securities.
SERBIA: The EUR/RSD broke below a key support level of 118.90 late last week, reaching a new 3-year low of 118.55.
Viewers can log heebelow and read the full report: Daily Overview November 6 2017
