KBC Market Research Desk
KBC Bank
Headlines
Business sentiment disappoints in Poland, remains high in the Czech Republic and Hungary
Polish deflation surprisingly deepens in September
Polish macroeconomic data surprise on the downside these days. The September inflation readings are more negative than expected (the CPI was down -0.8% y/y) and PMIs in manufacturing disappoints too, showing that that business sentiment in the Polish industry slipped to one-year low. Both output and new orders rose very slowly in September, and new export orders even declined for the first time since October 2014. We do not want to jump to conclusions grounded solely in today’s (yesterday) releases, but in our view it would not be surprising if speculations about a NBP’s rate cut proliferate, with adverse implications for the zloty, which might, in addition, face selling pressures due to upcoming election risks.
While September business sentiment worsened in Poland, it remains at very high levels in Hungary and in the Czech Republic. PMI indices in both countries are above the 55 level, which implies strong (manufacturing) expansion in both countries. September data obviously do not reflect adverse impact of the VW diesel scandal, but it is well possible that this impact can be perceived in later months. After all, VW has had strong presence in both countries; the Skoda brand has been well established in the Czech Republic, while Audi has been producing some models in Hungary.
| Currencies | % chng | |
| EUR/CZK | 27.17 | 0.0 |
| EUR/HUF | 313.3 | 0.0 |
| EUR/PLN | 4.25 | 0.2 |
| EUR/USD | 1.12 | 0.2 |
| EUR/CHF | 1.09 | -0.5 |
| FRA 3x6 | % | bps chng |
| CZK | 0.26 | 0 |
| HUF | 1.31 | -3 |
| PLN | 1.71 | 2 |
| EUR | -0.05 | 0 |
| GB | % | bps chng |
| Czech Rep. 10Y | 0.68 | -1 |
| Hungary 10Y | 3.36 | 3 |
| Poland 10Y | 2.85 | 1 |
| Slovakia 10Y | 0.87 | -1 |
| CDS 5Y | % | bps chng |
| Czech Rep. | 51 | 2 |
| Hungary | 168 | 6 |
| Poland | 76 | 0 |
| Slovakia | 52 | 2 |
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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