Daily Overview of Global Markets & the SEE Region (Thursday, 25 April, 2019)
WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Global equity markets advanced on Thursday as investors looked with hope to Treasury Secretary Steven Mnuchin’s and U.S. Trade Representative Robert Lighthizer’s visit to Shanghai next week for direct trade talks with Chinese negotiators. The weak global environment fueled market expectations for further monetary policy easing by major central banks, leading to lower core government bond yields. The 10-yr Treasury yield fell to a 17-session low of 2.02% in European trade at the time of writing, while the respective Bund yield was trading around record lows of -0.40% in early European trade. In FX markets, the EUR/USD traded around 1.1120, its lowest level since 30 May, ahead of today’s ECB monetary policy meeting with market participants pricing in currently a probability slightly above 50% for a 10bps interest rate cut. Elsewhere, the GBP was little changed around 1.2480 against the USD in early European trade, not far from the recent two-year low of 1.2380 on 17 July, shrugging off Boris Johnson’s aggressive tone on Brexit after his appointment with the Queen.
GREECE: According to Bank of Greece data, private sector domestic deposits amounted to €136.9 bn in June 2019 from €135.3 bn in May 2019 and €129.4 bn in June 2018, registering an increase of 1.2% and 5.8% on a monthly and annual basis, respectively.
SOUTH EASTERN EUROPE
CESEE MACRO & MARKET DEVELOPMENTS: In the absence of major market-moving events and data, the majority of emerging market assets concluded yesterday’s session with no major movements. Elsewhere, in the CESEE region, the picture is broadly similar; local currencies remained broadly unchanged as regional central banks remain in a wait-and-see mode ahead of today’s key policy meeting of the ECB. This being the case, the National Bank of Hungary (MNB) left both the policy rate flat at 0.9% and the overnight deposit rate unchanged at -0.05% at its policy meeting two days ago. On the flipside, in today’s policy meeting to be held by the Central Bank of Turkey, substantial rate easing in the range of 200-300 bps is widely expected.
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