Daily Overview of Global Markets & the SEE Region (Monday, 20 May, 2019)
WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: The majority of Asian bourses closed modestly higher today, amid hopes that a US/China trade deal could finally be agreed upon after the US announced on Friday that they reached a deal with Canada to lift tariffs of 25% on steel and 10% on aluminum. However, European bourses opened lower, weighed down by market anxiety ahead of the European elections that will be held from Thursday to Sunday. In FX markets, the AUD was among the key outperformers in early European trade, favored by the unexpected victory of the incumbent centre-right Liberal National Coalition at the 18 May federal election in Australia. Elsewhere, the GBP extended recent losses, amid fears over increased UK political uncertainty. On the data front, this week’s major releases include US Markit preliminary PMIs, euro area flash PMIs and the German IFO Business Climate Index, all for May and due on Thursday.
GREECE: GGB yields subsided in the past sessions with the 10-yr GGB yield closing at 3.455% on Friday and currently trading at 3.409% after having climbed to 3.585% last week while the 5-yr benchmark yield has retreated to 2.163% at the time of writing after hitting 2.470% last week, a more than a 1-month high. Focus this week turns to the European Parliament elections on 26 May and the turnover index in industry for March 2019.
SOUTH EASTERN EUROPE
CESEE MARKETS & MACRO DEVELOPMENTS: The majority of emerging assets weakened throughout the previous week with both the MSCI Emerging Markets equity and currency indices posting losses with investors’ appetite for risk assets remaining, along these lines, tepid, amid worries over the progress of a trade deal between the US and China and the consequences of the recent retaliatory measures adopted from each side. Elsewhere in the region, the Polish yields concluded the week on a firmer tone (+50bps since last Wednesday, currently at 2.887), broadly backed by the stronger than expected GDP flash estimate for Q1 which came in at 4.6% YoY vs the 4.4% YoY market consensus while in the local FX markets, the EUR/RSD maintained its adrift pattern moving just a few bps lower on a weekly chart, staying however within the common range of 117.85 – 118.00.
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