CEE Market Insights

Erste Group
By August 28, 2018 03:09

CEE Market Insights

Market outlook

Among CEE currencies, the Polish zloty and the Romanian leu performed the best, while the forint and the Czech koruna fell to some extent last week. The zloty’s relative strength could be underpinned by strong monthly indicators for July (which prompted from us an upside revision of the GDP forecast to 4.9% for this year), while the budget deficit is also seen as below initial plans by Polish authorities for this year. While US President Donald Trump again said that he wants a 25% tariff to be imposed on cars imported from the EU, our previous research shows that the impact of this would not be unmanageable for those CEE countries that are important car exporters (the Czech Republic, Slovakia, and Hungary).

10Y yields fell the most in Hungary, after the central bank expectedly flagged that loose monetary conditions are needed to get inflation to the 3% target in a sustainable manner. In the Czech Republic, however, short-term rates went further up as additional hike(s) might come in the remainder of the year, against the backdrop of a still relatively weak koruna.

Erste Group
By August 28, 2018 03:09

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