Daily Overview of Global Markets & the SEE Region (Thursday, 6 June, 2019)
WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: All eyes today are on the ECB Governing Council meeting following a recent bulk of mixed data and subdued inflation pressures with the 5Y5Y gauge of inflation expectations standing around 1.29% currently, not far from the mid-2016 record low of 1.25%. The official ECB policy statement is scheduled for release at 13:45 CEST followed by President Mario Draghi’s press conference at 14:30 CEST. Meanwhile, investors continue to digest Fed Chair Jerome Powell’s recent comments, which supported expectations for lower interest rates in the near future, especially if trade tensions start to weigh on the domestic economy. US Treasuries resumed their upward trend with short-dated paper outperforming on a daily basis. In FX markets, the JPY retained a firm tone favored by lingering anxiety over the US’s trade policy after a meeting yesterday between US and Mexico officials ended with few signs of progress.
GREECE: The European Commission published yesterday the 3rd review on Greece under the Enhanced Post Programme Surveillance (EPPS) which cautions against the government’s recent expansionary measures. As far as reforms are concerned, according to the EPPS report progress is mixed while the privatisations programme is behind schedule as regards a number of larger transactions such as HELPE, DEPA, Egnatia, Hellinikon and AIA. In the financial sector improvements are occurring but in a slow pace.
SOUTH EASTERN EUROPE
TURKEY: Inflation reading surprised to the downside in May for a second consecutive month.
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