Look for:

Products

Research Detail

2019/09/30 / Erste Group Research

CEE Market Insights


We will see retail sales growth figures in almost all CEE countries this week, and we expect a series of solid prints, as the tight labor market supports high levels of spending. Apart from that, industrial output will be published in Croatia and Serbia. Will it show similar weakness as in Poland last week or continue to recover? Furthermore, two central bank meetings are scheduled this week. Poland will hold its rate-setting meeting on Wednesday, with Romania set for the following day. Both central banks are expected to keep their policy rates unchanged. In Poland, prior to the MPC meeting, the flash CPI for September will be published. If our expectations for inflation to ease marginally are confirmed, there are more arguments to preserve the status quo and reject any motions for policy change, especially as inflation was above the target for the last couple of months. In Slovenia, inflation should remain in a tight band around 2%. On Friday, Moody’s will publish its rating assessment of Czechia; a rating upgrade to Aa3 from A1 cannot be ruled out. The country’s public debt ratio has been shrinking, while the country has been sitting on a positive outlook for more than a year.

The dollar strength was not too positive for CEE currencies last week. The zloty already had most of its fall the week earlier after it became official that the ECJ will release its ruling on FX mortgages on October 3 this week. We upped our EURPLN forecast to 4.36 for the year-end on the news. We also increased our forecast for the EURHUF to 330-340 (from 325-335 envisaged earlier) after the MNB decided to increase surplus liquidity at its rate-setting meeting last week. The koruna continues to stay weak, even after the last meeting minutes (again) revealed the CNB bank board’s hawkish bias. We have our CZK forecast under revision, but still see some appreciation of the koruna going forward.

Yields and rates moved little last week in CEE. The Romanian market could see two successful 2024 and 2029 government bond auctions after three consecutive auctions were scrapped earlier, although demand did not really skyrocket. Political and fiscal issues are still in the limelight in Romania. Meanwhile, the NBS seems to need to increasingly intervene on the Serbian dinar market, which underlines the risk that another rate cut could be in the cards already at the next monetary meeting. While this is not our baseline yet, we are watching how much the NBS needs to intervene in the coming weeks.


PDF Download Download PDF (484kB)

General information

AuthorErste Group Research
Date2019/09/30
Languageen
Product nameCEE Insights
Topic in focusFX, Macro/ Fixed income
Economy in focusCEE, Croatia, Czech Republic, Hungary, Poland, Romania, Serbia, Slovakia, Slovenia
Currency in focusCroatian Kuna, Czech Koruna, Euro, Hungarian Forint, Polish Zloty, Romanian Leu, Serbian dinar
Sector in focus-
Download



Accept

We use cookies and web analysis software to give you the best possible experience on our website. By continuing to browse this website, you consent for these tools to be used. For more details and how to opt out of these, please read our Data protection policy.

INFORMATION FOR CORPORATE AND INSTITUTIONAL CLIENTS

Any information, material and services regarding financial instruments and securities provided by Erste Group Bank AG or any of its affiliates (collectively “Erste Group“) on this and any linked website hereafter (jointly the “Websites”) shall be exclusively to investors who are not subject to any legal sale or purchase restrictions (the “Interested Party“).

The publication and distribution of information as well as offering and selling of products and services described on the Websites is prohibited by law in some jurisdictions. For this reason, persons in countries in which the publication as well as the offering and selling of products and services described on the Websites are not permitted by law, must not enter the Websites and/or acquire the products displayed on the Websites.

Neither Erste Group nor any third party shall offer access to the Websites or offer the products to especially, but not limited to citizen/residents of the United States and “U.S. person” (as defined in Regulation S under the US Securities Act 1933 as amended), citizen/resident of Australia, Canada, Great Britain and Japan. For this reason, the distribution or redistribution of the information, materials and products into United States, Australia, Canada, Great Britain and Japan or into any other jurisdiction where it is not permitted under the applicable law, as well as to the citizens/residents of these countries shall be prohibited.

The securities displayed on the Websites have not been and will not be registered under the US Securities Act of 1933 and trading in the securities has not been approved for purposes of the US Commodities Exchange Act of 1936. For this reason the securities may, inter alia, not be offered, sold or delivered within the United States or, for the account and benefit of U.S. persons.

The Interested Party is solely responsible to examine, whether he may enter the Websites under the law applicable to it. Erste Group shall not be responsible for the distribution of content of any of the Websites to individuals or entities which provide false information about their right to enter the Websites. For this reason Erste Group shall not be liable for any legal claims or damages which may result from the unauthorized entering or reading of the Websites.

By agreeing to this hereto, the Interested Party confirms that
(i) It has read, understood and accepted this Information and the Disclaimer;
(ii) It informed itself about any possible legal restriction and warrants that it is not restricted or prohibited to enter the Websites according to any law applicable; and
(iii) It does not make available the contents of the Websites to any person who is not qualified by law to enter the Websites.
(iV) It is no consumer.