Review

  • Polish industrial production in October came out better than expected when it fell by just 1.2% y/y in October, which was much less than we and the consensus expected. October’s industrial production numbers consequently confirmed continued recovery in the Polish manufacturing sector.

  • The Czech central bank board member, the Vice Governor Miroslav Singer, who voted for further reduction in interest rates at the last two monetary policy setting meetings, said on Thursday that strengthening of the CZK is one of the risks to the central bank’s inflation target and he would welcome looser monetary conditions than those that are in place now. His comments clearly indicates that he is likely to vote for a 25 basis points rate reduction again at December’s monetary policy setting meeting. The door for further rate cuts is still open.


Preview

  • A rather quite day in terms of economic data. It should be worth noting the release of the quarterly unemployment rate in Latvia. In Poland core inflation for October is due for release today.


Trading update

  • The EMEA FX markets were on the soft side on Thursday. The South African rand was especially weak. But rather than driven by domestic news the EMEA FX tracked EUR/USD development.

  • The short-end of the Czech money market rates came down about 10-15bp yesterday, as the market started to price in a 25bp cut to 1% at the monetary setting meeting in December.