Dr. Platon Chief Market Economist, Deputy General Manager, Eurobank Ergasias S.A.,
HIGHLIGHTS
WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: USD remained under selling pressure and US government bond yields were slightly lower in European trade on Monday reacting to a dovish shift in short-term Fed rate hike expectations following Friday’s disappointing US inflation and retail sales data for June. This week’s main event is the ECB monetary policy meeting on Thursday where President Mario Draghi is likely to adopt a slightly more dovish tone compared to that at the ECB Forum in Sintra on June 27th that triggered a sharp bond sell-off in recent weeks.
GREECE: According to press reports the Greek government is planning to tap the markets sometime this week with the issuance of a 5-year bond to raise c. 3 billion. At the time of writing the 10-year bond yield stood at 5.359% and the 2-year bond yield at 3.562%, the lowest levels since December 2009 and January 2010 respectively. According to the provisional data released by the Ministry of Finance for the budget execution on a modified cash basis, for the period January – June 2017 the state budget balance recorded a deficit of €1,597 million against the target for a deficit of €3,092 million in the Medium Term Fiscal Strategy (MTFS) 2018 – 2021 and a deficit of €1,852 million in the corresponding period of 2016.
SOUTH EASTERN EUROPE
SERBIA: The EUR/RSD traded in a narrow range of 119.90 – 120.25 last week as appreciation pressures on the dinar were mitigated by new intervention in the FX markets by the National Bank of Serbia
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