Introduction to CEE Market
Following a relatively quiet week in Central and Eastern Europe (CEE), the upcoming days are expected to be light in terms of data releases. However, several countries have important economic events scheduled, including Poland, Hungary, and Czechia.
Upcoming Economic Events
On Monday, Poland’s national statistical office will publish figures for industrial production, Producer Price Index (PPI), and wages for May. This will be followed by the release of retail sales data for the same month on Tuesday. Additionally, the Hungarian central bank will convene for a monetary policy meeting, where no changes to interest rates are anticipated. The Czech central bank will also meet on Wednesday, and it is expected that policy rates will remain unchanged due to high inflation in several household consumption-related sectors. Labor market data will also be released midweek, including unemployment figures from Poland and wage growth statistics from Serbia.
FX Market Developments
The FX market has remained relatively stable, with only marginal depreciation observed in the Hungarian forint and the Polish zloty. Several policymakers in Poland have expressed skepticism regarding the likelihood of interest rate cuts in July, citing recent geopolitical developments that pose short-term inflationary risks. Nevertheless, a scenario involving monetary easing toward the end of the year remains highly probable. The formation of a broad political coalition in Romania has contributed to increased political stability, supporting the Romanian leu, which has appreciated to below 5.05 against the euro.
Bond Market Developments
Last week, several CEE countries entered the sovereign bond markets. Hungary issued USD 4 billion through a three-part dollar-denominated debt offering, while Slovakia conducted an auction, raising approximately EUR 530 million. Hungary, Poland, Romania, and Czechia also tapped their respective local bond markets, issuing significant amounts of debt. Looking ahead, both Romania and Poland are scheduled to return to their local bond markets this week. Fitch emphasized that Romania’s progress on fiscal consolidation and debt stabilization remains critical for its sovereign credit rating.
Conclusion
In conclusion, the upcoming week is expected to be relatively quiet in terms of data releases in CEE. However, several important economic events are scheduled, including monetary policy meetings in Hungary and Czechia. The FX market has remained stable, while the bond market has seen significant activity, with several countries issuing debt to support budgetary needs. As the region continues to navigate economic challenges, it is essential to monitor these developments and their potential impact on the market. For more information, you can download the full CEE Market Insights report.
