Daily Overview of Global Markets & the SEE Region (Thursday, 20 June, 2019)
WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: At this week’s two-day policy meeting, which concluded late yesterday, the FOMC adopted a more dovish tone compared to that in the prior meeting, consistent with market expectations for lower interest rates in the coming months. USTs gained sharply with 10-yr yields testing levels below 2.0% for the first time since November 2016, while in FX markets, the USD came under pressure across the board. Looking at the remainder of the day, the BoE will publish the MPC’s policy decision and the minutes from the meeting that concluded yesterday, while two further ballots of Conservative MPs for the party leadership will be held today. Pro-Brexit Boris Johnson, the frontrunner to replace Theresa May, won the third ballot yesterday with three other candidates passing to the next phase.
GREECE: According to the Hellenic Statistical Authority (ELSTAT), in April 2019 the overall turnover index in industry increased by 13.4%YoY while in April 2018 it had increased by 6.5%YoY. On a monthly basis, the overall turnover index in industry rose by 10.7%. Finally, for the 12-month period March 2018 – April 2019, the overall turnover in industry increased by 9.3% compared to the 12-month period March 2017 – April 2018. In April 2018 the corresponding change was 7.6%.
SOUTH EASTERN EUROPE
SERBIA: Following Standard and Poors (S&P) rating agency’s credit rating affirmation of the Republic of Serbia at BB last Friday, Serbia returned for its first international bond deal after nearly six years. Seeking to take advantage of benign economic conditions, Serbia is offering EUR1bn of 10 year bonds in its first publicly syndicated euro deal, led by BNP Paribas SA, Citigroup Inc, Deutsche Bank AG and JP Morgan Chase & Co. Serbia set the pricing of the 10y year bond at 140 bps and aims at using the proceeds of the issuance to refinance bonds denominated in USD maturing in 2020 and 2021, both carrying much more lucrative coupons, i.e. 4.875% and 7.250% respectively. The tender offer of the two above mentioned USD bonds expired on Tuesday, same day the relevant road show ended while yesterday final terms were agreed with settlement date set as the 26th of June.
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