MGI Weekly round-up | June 2nd 2017

Stories MGI has been tracking this week:

  • Investors flock to Egypt, setting Middle East sovereign bond record
  • Italy’s economy booms as it reaches deal with EU to save oldest bank
  • Libya’s oil output hits highest level since 2014

 And as always, we feature content from the MGI data and analysis platform, a summary of the week’s key statistical releases, and a look to the week ahead in data. This week’s featured content highlights the week’s surprising growth story out of Italy.

Investors flock to Egypt, setting Middle East sovereign bond record
Despite recent terrorist attacks and the halting of a once-booming tourism industry,  investment is pouring back into Egypt, the Financial Times reports. The reforms the government introduced to access IMF funding have had the side effect of bringing a remarkable boom to the country’s capital markets. Leading the reforms, the Sisi government floated the Egyptian pound last November, which halved its price against the U.S. dollar, bringing greater competition to the region’s exports. Investors cited the floating currency as the primary turning point in their renewed interest in the Egyptian economy as the government held a bond auction that was four times oversubscribed.
 
Egypt’s bond issue is the latest in a streak of Middle East bond issues culminating in a record $35.5 billion in sovereign bond sales over the first five months of 2017.

Italy’s economy booms as it reaches deal with EU to save oldest bank
Italy’s first quarter GDP estimate was revised upward this week to 0.4% from 0.2%, outpacing many of the region’s top economies. The revision came just after a strong employment report that saw the jobless rate fall to a five-year low, surprising analysts (the market expected 11.6% unemployment while the actual figure was 11.1%).

The week also saw the Italian finance minister Pier Carlo Padoan reach an agreement with Brussels to rescue Italy’s oldest and third-biggest bank, Monte dei Paschi di Siena. The deal sees some bond investors accepting a haircut, as well as the implementation of a pay cap for senior management. EU rules dictate that if a Member State wishes to inject state capital in a private bank it must receive approval from the EU’s competition commissioner.

Libya’s oil output hits highest level since 2014
Despite a May 25th OPEC deal to cut production, Libya’s oil output has risen dramatically to 827,000 barrels a day—it’s highest since October 2014. The rise was driven by a boost in crude from the Sharara field, where output rose from 25,000 barrels a day to 250,000 barrels.

Libya has the biggest oil reserves in Africa and once produced up to 1.6 million barrels a day. The industry took a hit after the 2011 uprising. This recent data, obtained by Bloomberg, suggests the country is on a path back to its status as a top producer.

Featured content from the MGI.online data and analysis portal
Italy dominated the Mediterranean’s economic news cycle this week with its highest growth in 6 years and lowest unemployment in five years. In MGI.online’s national statistics database and visualisation tool, we can see observe these historic trends in real GDP and the unemployment rate. 

Looking ahead
Second estimates for first quarter GDP will continue to flow in from the region’s statistical agencies this week. We will also see the remaining May data for CPI inflation. Markets watch GDP and CPI closely, as the region’s central banks will use this data to shape monetary policy over the coming months. MGI’s complete data release schedule can be viewed at https://www.mgi.online/release-calendar/.

Monday 5 June, 2017:

  • Turkey inflation rate for May and PPI for May
  • Spain consumer confidence for May
  • Israel business confidence for May

Tuesday 6 June, 2017:

  • France PMI for May and retail sales for April
  • Malta IPI for April
  • Palestinian Territories IPI for April

Wednesday 7 June, 2017:

  • Spain industrial production for April
  • Italy retail sales for April
  • Tunisia inflation for May
  • Albania CPI for May

Thursday 8 June, 2017:

  • France balance of trade for April
  • Turkey retail sales for April
  • Greece unemployment rate for March and balance of trade for April
  • Malta real GDP for 2017Q1

Friday 9 June, 2017:

  • France industrial production and budget balance for April
  • Turkey GDP growth for first quarter 2017
  • Greece inflation rate for May
  • Israel consumer confidence and budget balance for May
  • Cyprus real GDP for first quarter 2017
  • Slovenia IPI for April