KBC Market Research Desk
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The Czech koruna ignores lower inflation figures
The June Hungarian inflation in focus
The Czech koruna and Polish zloty both slightly strengthened during yesterday´s session. Interestingly, the Czech currency more or less ignored lower inflation figures as the market has already priced in later exit from the intervention regime against the Czech koruna. Furthermore, the CNB has confirmed that it had already expected slightly lower inflation figures.
Meanwhile, the Polish zloty has strengthened by about 0.5% since the beginning of the week. Partly thanks to the fact that previously watched political issues have waned, partly due to the growing confidence that the NBP is going to keep the rates stable in the upcoming months (despite negative inflation figures).
The Hungarian forint has slightly lagged behind the neighbouring currencies. The inflation figures, scheduled for tomorrow, may attract some attention. We expect that the previous months tendencies may continue. It looks that the harvest might be quite good in this year, so no price pressure is expected. Tradable goods are relatively non-sensitive on the EUR/HUF movements as domestic demand is still subdued. The public utility cost reductions are still in the base which keeps inflation at very low level (-0.1% y/y/). The core inflation might remain around levels of 2.5% y/y seen in previous months. That should leave the doors open to further monetary easing.
This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.
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