Special Report | CEE | Economy The CEE labor market may seem barely affected by the virus if compared with a dramatic increase, first, in US jobless claims, and then the unemployment rate within a very short period of time.
CEE Market Insights This week, we will continue with releases of the GDP structure in Czechia and Slovakia. We also get to see the first estimate of Serbian 1Q20 GDP. Serbia is likely to be the sweet spot in the
CEE Market Insights At the end of this week, CEE countries will start to release their detailed GDP data for 1Q20. Croatia and Slovenia will publish their 1Q growth rates for the first time. We expect that Croatia’s economy grew
CEE Forex News | CEE | FX After the first wave of the new coronavirus, FX markets in the region have calmed down. Things are far from being back to normal, however. Due to …
CEE Market Insights Due Friday, economic growth in the first quarter in Czechia, Hungary, Poland, Romania and Slovakia will be the highlight of the week. Czechia and Slovakia are expected to contract 3.1% y/y and 3.9% y/y, respectively. Hungary, Poland
Once the turmoil caused by COVID-19 subsides, there will be a need for reflection and strategic decisions on how to move forward and be prepared for the next challenges to be faced. The vast majority of EU member countries opted
CEE Market Insights This week, the central bank meetings in Czechia and Serbia should be the key events in the region. While stability of rates is broadly expected in Serbia, the Czech National Bank is, in our view, about to
CEE Bond Market Report | CEE | Fixed Income The coronavirus pandemic has hit CEE hard. Governments in most countries have come out with substantial stimulus packages, but the deterioration of tax revenues will also hit budgets. An inevitable consequence
The week after Easter brings inflation releases across the region. For all of the countries, we expect to see easing inflation numbers in March. Such a development is mostly the outcome of the low oil price. On the other hand,
CEE Market Insights Determining the probable impact of the coronavirus on the economy is the main news topic at the moment. Over the weekend, Hungary announced the fiscal package and more details should be delivered at the beginning of the
CEE Market Insights This week in CEE Market sentiment data will be in focus this week – and the only question is by how much sentiment has worsened in March. Due to the dynamically changing situation, the February retail sales
CEE Market Insights This week, we will see the inflation rate in Croatia as well as labor market data. In Poland, retail sales and industrial growth in February will be published; however, the impact of the coronavirus is still likely
To mitigate its shrinking working age population, CEE has a hidden reserves in low female labor participation, low effective retirement age, as well as more active migration and family policies. There is no quick way to escape aging as the
Due to the rapid spread of COVID-19 in Europe, we will revise our CEE growth forecast downward by around 0.3pp toward 2.6%, with country-specific revisions going from around 0.3pp in the cases of Czechia, Hungary and Poland to as much
Special Report | CEE | Economy Inflation on rise in CEE, central banks get vigilant Inflation rates in CEE are currently among the highest in Europe. The series of upside surprises began in December 2019 and January repeated the pattern. Inflation
CEE Market Insights Economic data for January not hit by coronavirus, yet. Polish MPC to debate the rates. The week begins with release of Serbian 4QGDP and we expect to see the strongest performance since 2008. Further, industrial output and
CEE Bond Market Report CEE could face limited issuance this year. The fundamentals are generally fine, except for Romania, where the rating outlook is negative. High inflation does not warrant too much spread narrowing in CEE, except for Croatia and
CEE Market Insights This week in CEE Throughout the week, we will keep seeing inflation rate figures across CEE countries. In Hungary and Romania, we expect the headline number to land at 4.0% y/y in December, marking a visible increase
We wish all our readers Merry Christmas and a Happy New Year 2020. The next CEE Insights will be released on January 7. We now switch to holiday mood, as the macro release calendar will be pretty empty in the
November’s inflation rate will be published in most of the CEE countries and we expect it to rise everywhere. In Poland, an increase to 2.6% y/y should be confirmed, on the back of dynamic growth of food prices. The same
CEE Market Insights Serbia, Slovakia and Romania are the last three countries in the CEE world to release the 3Q19 GDP growth figure and its structure this week. With a complete picture on growth drivers across CEE, we will be
Throughout the year, CEE economies have been among the growth leaders in Europe. We expect them to remain so next year, despite external headwinds that are behind the slowdown. So far, strong domestic demand has been shielding the region from
This week, we should get confirmation that the strength of CEE economies lies in domestic demand. Consumer confidence is strong, as the unemployment rate hit historically low levels and wages keep growing. Such a situation translates into robust private consumption
This week is all about Thursday and flash GDP data releases for the third quarter in most CEE countries. Despite all the odds stemming from the worsening external environment and recent weakening of market sentiment, we expect the region to
It is going to be quite an eventful week, with four central bank decisions at the center of attention. After interest rate cut in the US and the Fed announcing a pause, we expect CEE central banks to remain on
Looking at the issuance performance so far this year, CEE countries have done a very good job. Several countries have already covered this year’s issuance plan and many others have also reached a high number. Slovakia seems to be lagging
Currencies fell last week in the region, but the stronger the yield declines of bond markets, the more robust the weakening in the currency that took place. We saw that regional markets reacted not much to international market developments (Saudi
Recently-published flash estimates of GDP growth in Central and Eastern Europe (CEE) depict a rather supportive picture of economic activity in the second quarter (Q2) (Exhibit 1). Undoubtedly, the quarterly growth clip decelerated somewhat, but remained laudable with Poland up
While markets are trying to digest what the ECB’s new measures may mean in the longer run, CEE will see first monthly indicators from the real economy from August, as Poland will release important figures that could provide important insight
Strong domestic demand shields CEE from German slowdown – for now Slowdown is expected for CEE, but growth difference vs. Euro Area could remain substantial Volatility to stay elevated on CEE FXFI markets
The US dollar’s strength did not do CEE currencies much good and while there were, in some cases, local factors behind the fall (especially in Hungary, where the HUF hit an all-time low), the decline in regional FX could mostly
Which weapon will be drawn next? The trade dispute continues to dominate financial market activity. Which weapon will be drawn next? Will China also raise tariffs in retaliation after the recent escalation by the US, or perhaps even block exports
The moment of truth could come this week, as 2Q19 GDP releases could indicate how much the German manufacturing slowdown plagued CEE growth. This could easily have implications for regional currencies and rates, too. Last week’s positive performance of the
CESKE DRAHY Earnings Developments The year 2018 has seen accelerating growth for CD. The ongoing transformation of CD into a modern, efficient, competitive and customer-focused railway mobility Group is supported by large investments and a strong Czech economy. Group revenues
CEE currencies became more attractive as the lack of room to ease rates domestically met with decreasing rate expectations on major markets. The Czech koruna seems to be the slight exception, as rate expectations are also easing there, given the
Given the demographic challenges, reliance on the PAYG system implies lower benefits for pensioners, a need to increase social contributions or retirement age in the future. As a decision is needed in a matter for decades rather than immediately, the
Fixed Income | CEE Domestic demand should soften the slowdown in GDP growth Not all CEE countries have managed to build sufficient fiscal space Czech and Hungarian central banks to tighten monetary conditions this year
Accelerated credit growth in CEE should not cause any headaches. Current growth rates are well below the 20-30% pre-crisis credit growth dynamics. Debt to GDP ratios are also rather low. As interest rates remain low, central banks carried out macro
Market outlook The EURRON was finally put under control last week. It was clearly benefiting from the more dovish FED together with other regional currencies, but domestic factors might have also been at play, including recent statements by the finance
At the beginning of the new decade, CEE countries are likely to face a number of challenges as far as economic growth and convergence are concerned. Although the current EU funding programming period ensures the CEE region a solid flow
Government bond yields should drift higher in 2019 Only Czech National Bank is to increase rates this year We expect sovereign rating upgrades in several CEE countries
GDP growth to decelerate in 2019 due to weaker external environment Hard Brexit and trade wars remain main risk for growth in CEE Checklist of most important events in CEE to be watched in 2019
Market outlook All CEE currencies except for the Serbian dinar gained last week. While the koruna, forint, zloty and leu benefited the most from the EURUSD development, the appreciation of the Croatian kuna seems to have been driven by strong
Market outlook Currencies showed a mixed performance in CEE last week. The Polish zloty pared earlier losses, as investors seem to have swallowed the corruption scandal to some extent. Currently, the EURPLN is close to our forecast. In Hungary, however,
Credit Markets Weekly Most recent US measures were not entirely surprising So far, the European credit markets have not reacted to the recent development in the trade conflict between USA and China. In fact, spreads have even narrowed slightly. This
Market outlook The best regional performer was the Czech koruna, boosted not just by rate hike comments, but perhaps also by increasing hopes that the prospects of a large-scale trade war are fading. The forint only benefited towards the end
GDP growth still favorable on average in second quarter Limited-scale trade war could be manageable for CEE CEE could still bear high wage growth, but increasing pressure to reform
Week ahead Next week (September 21), a flash estimate of the manufacturing sentiment of the Eurozone, Germany and France will be published for September. The sentiment slightly declined in August, due to the worsening of the trade conflict and the
Outlook CEE currencies mostly fell last week, amid renewed tensions in Turkey and Argentina, although Friday saw some positive correction. The Hungarian forint suffered the most, while the CZK seems to have benefitted from increased expectations of additional hike(s) from
CEE currencies were hit last week, due to the deterioration in international sentiment. The EURHUF breached historical highs (above 330); the forint was the most vulnerable, as the ultra-dovish MNB policy amplified international woes. Without a change in the MNB’s
