HIGHLIGHTS
WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: According to the advance estimate, US Q1 2018 GDP slowed to 2.1%qoq saar compared to 2.9% in Q4 2017, albeit higher than 2.0% expected. Looking ahead, the soft patch in Q1 is likely to prove transitory as business investment growth remains solid and private consumption is expected to benefit in the quarters ahead from an ongoing improvement in labor market conditions, a pickup in wage growth and an additional impulse from tax cuts. The FOMC convenes this week (1-2 May) where the target range for the federal funds rate is expected to remain unchanged at 1.50%-1.75% and officials to point to the temporary nature of the Q1 slowdown. In the UK, following last week’s sharper than expected Q1 GDP slowdown, focus this week is on the preliminary PMI figures for April for guidance on the direction of the economy and the timing of the next BoE rate hike.
GREECE: The 27 April Eurogroup discussed the progress in the implementation of the 4th review prior actions and decided the return of the institutions to Athens on 14 May with a view to achieving a Staff Level Agreement at the 24 May Eurogroup. Greece expressed its intention to not request a successor programme while the European Commission submitted its proposal for ‘enhanced surveillance’. In April 2018 the economic sentiment indicator rebounded to 103.6 points, up by 3.8 points compared to March 2018.
SOUTH EASTERN EUROPE
SERBIA: The EUR/RSD remained bound within a tight range of 118.0 – 118.25 last week, with several interventions from the National bank of Serbia halting any upside momentum for the dinar.
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