KBC Market Research Desk
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Weak Polish retail sales prompt rate cut speculations
Escalation of Ukrainian crisis might weigh on CEE region
CEE currencies faced up to pressure yesterday; suffered losses however were not grave. The Hungarian forint slipped by 0.2 % due to profit-taking following a surge to the four-week high reached after the NBH had announced the end of the monetary easing cycle. Also the Czech koruna remains table, despite slight weakening due to fresh signals that the exit from the FX intervention regime will come later than expected. In Poland, the statistical office published retail sales data on Wednesday, which were considerably worse than expected and prompted speculations that NBP would be forced to cut rates. Although two central bankers – Marek Belka and Andrzej Kazmierczak – denied a need to change the base rate, the zloty eased and bond yields dropped.
Today’s regional calendar is empty; hence markets´ attention will be paid to events elsewhere in the world. A fresh Ifo business climate index was published in Germany this morning, which surprisingly lagged behind both ours and markets´ expectations. The news might negatively affect CEE countries since Germany ranks among their most important trading partners. In addition, the Ukrainian crisis might also weigh on the region. History has shown us that the zloty as well as the forint are sensitive to rising tension in Ukraine and yesterday’s resignation of the Prime minister Arsenij Jaceňuk together with louder calls for stronger sanctions against Russia will certainly not contribute to positive sentiment in the Central European region.
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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