Review
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South African manufacturing production in September was slightly better than expected, contracting 11.4% y/y. Consensus expectation was -13.0%. August’s output was revised down to -15.2% y/y (from -15.0% y/y). We expect manufacturing production to continue to improve, indicated, for example, by the ongoing improvement in PMI.
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Quite good current account and trade balance numbers for Poland in September: C/A deficit of EUR 57m and a trade deficit of only EUR 4m. The improvement is primarily a result of much stronger exports than expected. Undoubtedly good news for the Polish economy.
Preview
- Fairly eventful day in terms of economic data today. Most interesting will be Hungarian inflation, which we expect to inch down further. The same trend is likely for Romanian inflation.
Trading update
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Following the recent surge in risk aversion and consequent sell-off in EMEA currencies, our EMEA FX Scorecard has turned positive for the first time in two weeks. We therefore call an end to the correction in EMEA FX markets.
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It was relatively calm on EMEA FX markets on Tuesday, but in line with the signals from our Scorecard, most currencies in the regions strengthened. Notable among the top performers of the day was PLN and CZK, which for some time have been the highest scoring currencies on the EMEA FX Scorecard.
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Even though the score for ZAR has moved back into positive territory, we are a bit puzzled at how strong the rand has been performing recently – given the lack of any major positive news on the South African economy.
