In Bulgaria, the initial results from Sunday’s parliamentary elections indicate that the opposition centre-right party, GERB, under the leadership of Sofia’s mayor, Boyko Borisov, has won a landslide victory over the governing Socialist party. However, GERB failed to achieve an outright majority on its own and will therefore have to rule with the support of other centre-right parties. The strong showing for GERB makes it more likely that a majority centre-right coalition government will be formed soon. A swift formation of a new government would undoubtedly be well received by investors.
On Friday, Ingrida Simonyte was appointed as new Lithuanian Finance Minister, replacing Algirdas Semeta, who was appointed as Lithuania’s representative at the European Commission. Read our comment.
Turkish inflation rose to 5.73% y/y in June – up from 5.2% y/y in May and in line with the consensus expectation.
On Friday, the Polish central banker, Noga, said that inflation in June is likely to remain at 3.6% y/y – flat compared to May. Furthermore, he said that he sees no room for further monetary easing this year.
Minutes from the latest board meeting in the Czech Central Bank were published on Friday. The minutes were fairly balanced in terms of inflation risks, but they didn’t suggest much about monetary policy going forward.
Industrial production for May in Lithuania will be published today. We expect industrial production to have dropped by 17.7% y/y in May – more than the drop of 16.9% y/y in April.
Public holiday in the Czech Republic and Lithuania today.
Trading update
EMEA markets performed very well last week, but a weaker-than-expected US labour market report on Thursday increased global risk aversion and took some steam out of the rally in EMEA currencies. Given the outlook for relatively few macro economic releases this week, we expect global sentiment to be key for the performance of the EMEA markets.
