KBC Market Research Desk
KBC Bank
The Central European currencies remained quite calm on Friday, especially vis-à-vis a strong depreciation of the euro triggered by dovish comments of ECB President Draghi. The zloty led gains and appreciated by about 0.3 % against the common currency and hit a five-week high after it breached (only temporarily) a support at EUR/PLN 4.20. Meanwhile, forint and koruna strengthened only negligibly. Draghi’s comments have however supported government bonds in Hungary as well as in Poland; 10-year yields fell by 8 bps and 9 bps respectively (see the chart below).
This week’s calendar is filled quite well. Apart from details of Czech and Polish GDP for the third quarter (and for example, Polish retail sales for October), markets will watch a meeting of the Hungarian central bank scheduled for tomorrow. Although we expect no change in rates in the remainder of this year, we do not exclude a possible rate cut in the beginning of the next year.
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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