Daily Overview of Global Markets & the SEE Region (Tuesday, 14 May, 2019)
WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Risk off mode prevailed in early trade on Tuesday on the back of intensified US/China trade concerns. In response to the US administration’s decision last week to raise tariffs on $200bn worth of imports from China to 25% from 10%, China’s Ministry of Finance announced on Monday that $60bn US goods will be subject to increased tariffs of 5%, 10% and 25% effective on June 1. On its part, retaliating against China’s increased duties, the US Trade Representative’s office said that it plans to hold a public hearing next month on the possibility of imposing duties of up to 25% on a further $300bn worth of imports from China. Favored by global equity markets’ lackluster performance, core government bonds retained a positive tone, while in FX markets, the CHF and to a larger extent the JPY remained well supported.
GREECE: According to press reports, the European institutions are considering blocking the approval of the early repayment of part of IMF loans, in reaction to the pre-election stimulus measures that were tabled to Parliament yesterday.
SOUTH EASTERN EUROPE
CESEE MACRO & MARKET DEVELOPMENTS: The sharp escalation in the U.S. and China trade tensions over the last few sessions paused this year’s rally in emerging markets as China’s decision to retaliate against increased U.S. tariffs by imposing duties up to 25% to 2.5ths American products starting June 1 boosted investors’ risk off sentiment. In Serbia, the CPI print for April came in at 3.1% YoY from 2.8% YoY in March while in Bulgaria, according to the official statistical data released yesterday, the external merchandise trade deficit narrowed by 75.7% YoY to EUR 31.4mn in March.
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