Daily Overview of Global Markets & the SEE Region (Friday, 5 July, 2019)
WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: According to data released earlier today, new orders in the German manufacturing sector dropped by a higher than expected 2.2%MoM in May after rises of 0.4%MoM and 0.7%MoM in April and March, respectively, pointing to further industrial weakness in early H2 and adding to the prevailing market view for further monetary policy easing by the ECB in the coming months. European government bonds remained well supported with the 10-yr Bund yield hovering around -0.39% in early European trade at the time of writing, within distance from yesterday’s fresh record low close to -0.41%. In FX markets, the EUR moved lower against the USD, hovering around 1.1260/65 at the time of writing, 0.2% lower on the day and poised for a weekly drop of 0.9%, the biggest since mid-June, on the view that under Christine Lagarde, the ECB’s dovish stance will likely be continued. Focus today is on US non-farm payrolls for June.
GREECE: According to the European Commission, Greece will be in the agenda of the next Eurogroup that will take place next Monday (8 July 2019). one day after the general elections in the country (7 July 2019).
SOUTH EASTERN EUROPE
CESEE MACRO AND MARKET DEVELOPMENTS: The majority of emerging market assets ended in the black yesterday after two negative sessions. Elsewhere in the region, Central European currencies were broadly unchanged and regional equity markets kept moving adrift. In Romania’s central bank meeting that took place yesterday, the key policy rate was kept unchanged at 2.5%, in line with market expectations.
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