Review
- Lithuanian unemployment rose to 13.6% in Q2 up from 11.9% in Q1 and confirmed that the sharp economic slowdown continues to weigh negatively on the Lithuanian labour market. Unemployment is expected to rise further, but perhaps the pace might slow down.
Preview
- In Estonia, disinflation continues on the back of a weak domestic environment. Looking ahead, subdued inflation should continue next year: we forecast average inflation in 2010 of -0.8% y/y.
Trading update
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Most EMEA currencies started Friday’s session softer, reflecting ongoing risk aversion in financial markets, with the exception of the ZAR, which gained ground on Friday morning on the back of a surging gold price. EMEA FX remained more or less flat or rather softer over the day even after the eagerly-awaited US jobs report. Despite the employment report coming out somewhat better-than-expected, the impact on EMEA FX was limited.
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On Thursday night the Hungarian central bank deputy Ferenc Karvalits said that the inflation outlook and economic downturn make it necessary to ease monetary conditions further. His comments and surprisingly soft Turkish inflation for August pushed Hungarian and Turkish swap rates down as the expectation of further cuts from these two countries’ central banks has risen.
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As the day will lack any market-moving data, global financial markets should set the tone for EMEA markets.
