WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: According to today’s newswires, preliminary talks in Germany between the CDU/CSU and SPD for the formation of a grand coalition concluded successfully. Easing political jitters pushed the EUR higher across the board hitting a fresh year-to-date peak of 1.2133 against the USD. The hawkish tone of the Account of the December ECB monetary policy meeting that was published yesterday was also behind the EUR’s latest upward leg. Meanwhile, core euro area bonds were under pressure, in reaction to the Account of the ECB meeting. Focus today is on US CPI for December. Consensus is for a drop in the headline to 2.1%YoY from 2.2%YoY in the prior month mainly due to lower oil prices while core inflation is expected to remain stable at 1.7%YoY.
GREECE: Based on press reports, the Euroworking Group that convened yesterday concluded that in order to make a positive assessment on the progress made in the conditionality of the 3rd programme review, the multi-bill containing legislation for c. 60 prior actions needs to be voted in Parliament first (expected to take place on Monday) while any remaining prior actions must be fulfilled by Friday, January 19. According to the Hellenic Statistical Authority (ELSTAT), the seasonally adjusted unemployment rate in October 2017 was 20.7% compared to 23.3% in October 2016 and the upwards revised 20.8% in September 2017.
SOUTH EASTERN EUROPE
CESEE MARKETS: The majority of emerging market moved broadly higher earlier on Friday as the USD retreated.
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