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Daily Overview of Global Markets & the SEE Region (Tuesday, 4 June, 2019)
HIGHLIGHTS
WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Depressed market mood towards risk assets prevailed in early European trade on Tuesday amid rising worries over the global growth outlook on the back of the escalating US/China trade war. Poor US data showing that the manufacturing ISM index slowed further in May from 52.8 to 52.1, the lowest level in more than 2½ years had also had an impact. In reaction to the above, USTs remained well supported, while dovish comments from St. Louis Fed President James Bullard yesterday also favored. In FX markets, risk-off mode continued to support both the JPY and the CHF. Elsewhere, the EUR/USD gained some ground for the third session in a row, showing resilience to mounting political jitters in Italy and lingering worries over the Eurozone’s growth outlook. Looking at today’s calendar, focus is on the flash Euro area HICP figures for May.
GREECE: On Monday GGB prices rose further and yields fell to new record lows in the domestic electronic secondary bond market. The 10-yr Greek benchmark bond yielded 2.90% from 2.99% on Friday, while at the time of writing it stands at 2.866%. The 5-yr bond yield fell to 1.71% on Monday from 1.78% last week while currently it trades at 1.709%. According to HIS Markit Manufacturing PMI, the health of the Greek manufacturing sector continued to improve in May 2019 with the index registering 54.2, down from April’s 56.6 reading but still above the 50 units’ threshold, signaling a solid improvement in operating conditions.
SOUTH EASTERN EUROPE
CESEE MACRO & MARKETS DEVELOPMENTS: The majority of emerging equity markets and currencies picked up as the Chinese Manufacturing PMI data released yesterday showed that factory activity remains stable, confounding market expectations for further slowdown.
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