HIGHLIGHTS
WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Oil prices were higher in early European trade on Wednesday with the Brent crude hitting a three week peak of $76.93/br earlier today on news that the US presses all countries to cut oil imports from Iran to zero by November 4. Meanwhile, the likelihood of a resolution in US/China trade tensions seems to remain a distant prospect. The US House of Representatives overwhelmingly passed a bill on Tuesday to tighten foreign investment rules and the US President endorsed US Treasury Secretary Steven Mnuchin’s measured approach to restricting investments in US technology companies, applying to all countries “that are trying to steal (our) technology”, not just China. Core government bonds were little changed on the day while, the DXY index halted a four-session declining streak rising 0.4% from Tuesday’s two-week intraday low.
GREECE: According to press reports, the ESM proposal that was submitted to the German Parliament for the approval of the last loan tranche of €15 billion, foresees that the amount may be disbursed in more than one installments. The ESM will also reportedly have the right to re-direct the cash-buffer amount (€9.5 billion) to alternative uses should this be deemed more beneficial. According to the Greek Ministry of Finance’s final State Budget execution data for January – May 2018, the primary surplus for the first five months of 2018 was €1.53 billion, significantly higher by €1.35 billion or 747.2% than the respective 2018 Budget forecast.
SOUTH EASTERN EUROPE
CESEE MARKETS: Emerging market assets broadly remained under pressure earlier on Wednesday, amid ongoing concerns that a trade war could weigh on global economic activity, while key emerging market stock indices entered a bear market earlier this month. In FX markets, most currencies lost ground on deteriorating risk appetite and a stronger USD.
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