http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/http://www.fxstreet.com/fundamental/http://mediaserver.fxstreet.com/images/fxstreet-provider-logo1-en.gif7http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-11-06.htmlFocus on inflation and GDP In the coming week the macroeconomic calendar is dominated by inflation numbers for October and GDP numbers for Q3, for a number of countries across the region. While we expect to see some stabilisation in the GDP numbers for the Czech Republic and Hungary, the Estonian and Lithuanian data are likely to show a continued deterioration in the macroeconomic environment. In terms of inflation, we are likely to see inflation continue to inch down across the region. ThatFri, 06 Nov 2009 13:13:16 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-11-06.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-10-30.htmlPMI inches up across the region, but who cares? Next week will see PMI data for October for most countries across central and eastern Europe (CEE). In the recent month the PMI has rebounded across the region in line with the general global trend. We expect the PMI to have increased further from September to October in most countries in the region and in most countries the PMI will now have moved back to around or even above 50, indicating expanding economic activity inFri, 30 Oct 2009 14:12:07 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-10-30.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-10-23.htmlBaltic worries unlikely to disappear Recently worries over the situation in Latvia have resurfaced and they seem to be on the minds of investors as a possible “game spoiler” for the CEE markets. Yesterday Latvian Finance Minister Einars Repse suspended the head of the country's tax office as part of a long-running dispute. This might lead to speculations about the stability of the ruling coalition. Next week the Latvian government is supposed to present its 2010 budget to the LatvianFri, 23 Oct 2009 13:45:46 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-10-23.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-10-16.htmlKey events next week The coming week brings rate decision meetings in Hungary (Monday) and in South Africa (Thursday). In Hungary we expect a 50 basis points cut and in South Africa we look for unchanged rates. Both views are in line with the consensus expectation. Otherwise next week’s calendar is fairly thin. However, we could be in for another week of market jitters if the Latvian situation develops further. The Latvian government is due with its 2010 budget on October 28, and we could beFri, 16 Oct 2009 17:52:22 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-10-16.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-10-09.htmlKey events next week Next week is scheduled to bring September inflation figures in a number of countries. We expect Polish inflation to remain flat compared to previous months and in Hungary we expect it to inch slightly up. It should prove worth paying attention to the release of Polish labour market data. Other than this plenty of figures from Russia are due out. Latvia is set to remain in the spotlight. Fixed income outlook The rally in the EMEA fixed income markets has continued this weekFri, 09 Oct 2009 20:21:15 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-10-09.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-10-02.htmlKey events next week Next week brings September inflation figures in a number of countries . In general we expect inflation to inch down a little further. In the Czech Republic we expect inflation at 0.0% y/y, while Russian inflation is expected to drop to 11.0% y/y. On Wednesday the Hungarian central bank is due to release the minutes from its latest monetary policy meeting. Fixed income outlook Markets rates have moved sharply higher in Hungary and Turkey this week as market participantsFri, 02 Oct 2009 12:37:51 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-10-02.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-09-25.htmlAnybody that follows the global currency markets knows that it is notoriously difficult to forecast exchange rates for any horizon and the “market themes” keep changing from day to day. Therefore, any investor or analyst involved in the FX markets need as much help and information as possible. However, everybody involved in the markets are familiar with “information overload”, where more information makes decision-making more complicated rather than easier. To reduce the dimensionality ofFri, 25 Sep 2009 15:25:32 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-09-25.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-09-18.htmlTrying to understand Czech politics can be a challenge. One thing is guaranteed – the observer will not be bored. Even though market watchers, focusing on the central and eastern European (CEE) markets, are somewhat used to the fact that political turmoil (from time to time) is a part of the game, many observers would probably confirm that the Czech politicians are masters of their kind. Czech politics came into the spotlight when the Czech Republic held rotating EU presidency during the firstFri, 18 Sep 2009 13:47:22 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-09-18.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-09-14.htmlPoland undoubtedly has been the star performer in central and eastern Europe (CEE) during the global credit crisis and is one of the few countries in Europe that might see positive GDP for 2009 as a whole. However, Poland is facing some key challenges as we approach 2010, which make 2010 as challenging, or maybe even more challenging, for Polish policymakers than 2009. There is especially reason to focus on three key challenges that potentially could spook the Polish markets in 2010 – or maybeMon, 14 Sep 2009 10:59:47 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-09-14.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-09-04.htmlThis week we published our Macro Monitor on Hungary. It is an updated outlook on the Hungarian economy taking into account the latest economic releases for July and August. Hungarian economic growth declined further in Q2 09 down to -7.6% y/y, but the decline is reaching the bottom and a slow and fragile recovery of the Hungarian economy awaits. We expect Hungarian GDP to contract 7.1% y/y in 2009 and 0.8% y/y in 2010. July’s VAT hike is likely to slow down the recovery of the HungarianFri, 04 Sep 2009 13:37:56 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-09-04.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-08-28.htmlLast week saw strong PMIs in the eurozone (see comment). Next week manufacturing PMI’s are due to be released for most of the CEE economies and these numbers could possibly be similarly strong readings. The improvement in PMIs is also beginning to show in numbers on industrial production and this is a strong indication that a recovery in the CEE manufacturing sector is well under way. At the beginning of 2009 manufacturing activity in CEE had dropped significantly to an historically low point.Fri, 28 Aug 2009 14:08:01 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-08-28.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-08-21.htmlDuring the global economic crisis Poland has been one of the only European Union member states which has not experienced negative year-on-year growth. We do not expect this to have changed during Q2 09 (even though it will be close) and forecast GDP growth of 0.3% y/y (consensus is 0.5%) compared to 0.8% y/y in Q1 09. The Polish economy held up better-than-expected in Q4 08 and Q1 09 as the country entered the crisis with high growth. Meanwhile neighbouring countries experienced significantFri, 21 Aug 2009 15:12:13 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-08-21.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-08-14.htmlThe financial magazine The Economist has made the so-called ‘Big Mac Index’ famous. The Big Mac Index uses the price of a Big Mac to illustrate the so-called Law of One Price, by comparing the price of a Big Mac in different countries and thereby saying something of the valuation of the respective currencies. The Law of One Price basically says that any (tradable) good should have the same price in all countries in the long run. Hence, simply put, if a Big Mac is more expensive in Poland thanFri, 14 Aug 2009 14:11:23 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-08-14.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-08-07.htmlAlthough the Russian economy is beginning to show signs of stabilisation – visible in the manufacturing sector and the labour market – there are still serious financial issues that have to be dealt with going forward. Public finances have worsened significantly since Q4 08. Overall expenditure is up by around one-third and revenues have dropped by around one-fifth, as the public budget balance has turned negative. The Ministry of Finance of the Russian Federation (MoF) is currently processingFri, 07 Aug 2009 13:50:27 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-08-07.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-07-31.htmlThe IMF’s executive board last week approved the USD250bn SDR allocation agreed upon at the April G-20 meeting in London. The board of governors (representing IMF member countries) will vote on the proposal on 7 August and, if approved, the SDR allocation should be available to countries by 28 August. The whole SDR allocation will be made available immediately – i.e. not gradually as was the case in previous SDR allocations. SDRs allocated to members will count towards their reserve assets andFri, 31 Jul 2009 14:53:01 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-07-31.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-07-24.htmlThis week we published our new Macro Monitor on Poland . It is an updated outlook on the Polish economy taking into account the latest economic releases for May and June. In general the Polish economy is looking at a couple of quarters of further decline in economic activity before a likely slow and fragile recovery begins. Polish GDP growth should move into negative territory in Q2 09 and bottom out in Q3 and Q4 09. We expect GDP to contract by 0.3% y/y in 2009 and to grow by 0.2% y/y inFri, 24 Jul 2009 14:47:06 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-07-24.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-07-17.htmlJust as signs that the Central and Eastern European manufacturing sector is beginning to stabilise, a new concern for growth is emerging: deteriorating labour markets are beginning to weigh on private consumption and this could postpone a recovery in the CEE economies into 2010. The boom in the CEE economies prior to the global crisis was largely driven by very strong growth in private consumption and overall CEE consumers have been holding up surprisingly well during the crisis. Hence, to aFri, 17 Jul 2009 13:17:14 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-07-17.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-07-10.htmlMost of the new EU member states have an official goal of joining the euro area as fast as possible. However, as the economic crisis has deepened this has become increasingly ambitious as public finances have deteriorated across the region and for a number of new EU member states it looks unlikely that they will fulfil the Maastricht criteria anytime soon. Especially the 60% criterion for public debt seems to be a major challenge. This week a leaked report from the European Commission revealedFri, 10 Jul 2009 13:01:36 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-07-10.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-07-03.htmlThis week the Croat Prime Minister Ivo Sanader announced that he is retiring from politics. This adds to the political uncertainty in Croatia and increases doubts about the implementation of fiscal authority measures. Political uncertainty is also on the rise on Bulgaria, where parliamentarian elections will be held on Sunday. Sanader’s resignation was a complete surprise and raises a lot of questions - especially regarding Croatia’s aspirations to join the EU and the prospect of fiscalFri, 03 Jul 2009 13:25:29 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-07-03.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-06-26.htmlThe economic deterioration in Latvia and ongoing speculation that the Lat will be devalued have sparked discussions about whether we will see contagion from Latvia to other Baltic and CEE countries. Will the crisis in one country spark crisis in another? In global economic history and the history of currency crises, there are examples of one country’s crisis spreading to other countries. Two notable examples of this are the ERM crisis in 1992-93, when we saw a currency crisis in many EuropeanFri, 26 Jun 2009 14:39:57 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-06-26.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-06-19.htmlRussian financial markets have stabilised in the last four months driven by renewed risk appetite in the midst of hopes of green shoots appearing in the global and Russian economies. This led to a doubling of the value of Russian equity markets and pushed the rouble around 10% stronger against the dual currency basket as oil prices advanced. Interest rates fell steeply too as the liquidity situation improved. However, the economic outlook is uncertain, which increases financial risks . DataFri, 19 Jun 2009 12:47:41 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-06-19.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-06-12.htmlIn recent years there has been a very significant increase in economic imbalances in most CEE countries. However, we are now in a rebalancing phase, in which these imbalances are being reduced. In some countries this rebalancing process is proving to be quite swift, but also painful. One only needs to point to the massive drop in domestic demand in countries like Latvia to demonstrate how painful this adjustment can be. Fundamentally, what we are now witnessing across CEE is an unavoidableFri, 12 Jun 2009 12:24:50 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-06-12.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-06-05.htmlOver the last couple of weeks, fears over a possible devaluation of the Latvian lat have escalated. This has led to a sharp spurt in money market rates, not just in Latvia, but also Estonia and Lithuania. Furthermore, markets are clearly nervous that a possible devaluation in Latvia could spark trouble in other Central and Eastern European markets, which, to a larger or lesser degree, have similar economic imbalances to Latvia. Why are the markets increasingly pricing in a risk of devaluationFri, 05 Jun 2009 07:54:50 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-06-05.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-05-29.htmlJune 4 is an historic day for Poland, Europe and the world, as it marks the 20-year anniversary of the first free elections in Poland in 1989. The elections, which gave the Solidarity movement a landslide victory and brought an end to Communism in Poland, marked the start of an enormously successful economic and political transition that has transformed Poland from a backward country, with an inefficient economy on the fringes of Europe, to a thriving modern economy at the centre of Europe.Fri, 29 May 2009 14:06:29 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-05-29.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-05-22.htmlRecently the European Commission published its spring forecasts for the EU economies. The report among other things sheds light on how the drop in economic activity will affect public finances in the membership – including in Central and Eastern Europe. In the CEE countries in particular the worsening of the outlook for public finances is a key challenge for two reasons. First, it makes it nearly impossible for most of the new EU member states to fulfil the public finance criteria for euroFri, 22 May 2009 06:58:42 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-05-22.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-05-15.htmlIn April the IMF published its Global Financial Stability Report (GFSR). The report sparked a huge debate after Central and Eastern European policymakers claimed that the IMF had made serious mistakes in the calculation of the refinancing needs for a number of CEE economies. After checking (and we hope double checking) the numbers, the IMF has now admitted that some of the numbers published in GFSR were in fact incorrect and the IMF has now published the revised numbers. The revised numbers inFri, 15 May 2009 14:38:52 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-05-15.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-05-08.htmlThis week the European Commission published its so-called Spring Forecast for the EU economies. The report is interesting reading – especially for policy makers in Central and Eastern Europe – and it has already sparked debate about a number of key policy issues. The European Commission now expects negative GDP growth in all New Member States in CEE (cf. forecasts in the table to the right). In general we think that the Commission’s forecasts for GDP growth across the region areFri, 08 May 2009 09:01:18 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-05-08.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-05-01.htmlThe pressure on the Central and Eastern Europe currencies over the last six months and increased concerns over financial stability in the region have led to calls from a number of CEE governments and central banks for swift euro adoption in the new member states. Most notably, the Polish government has – until recently – pushed for Polish ERM2 entry this year, and the Estonian government has repeatedly stated its goal of swift euro entry. Furthermore, it now seems clear that the IMF and theFri, 01 May 2009 12:18:56 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-05-01.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-04-24.htmlWhile the global economy is showing tentative signs of improvement and some risk appetite has returned, Latvia’s economic woes have simply got worse. Hence, over the last couple of weeks speculation has increased that Latvia will not receive its June instalment on its IMF loan, as the IMF doesn’t believe that the Latvian government has fulfilled its obligations in the Standby agreement. In our view, if the IMF does not pay the June instalment, then Latvia would be pushed very close to aFri, 24 Apr 2009 12:33:35 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-04-24.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-04-17.htmlOver the last few months, the IMF has increased its presence in Central- and South Eastern Europe by securing standby agreements (SBA) to countries like Belarus (USD 2.5bn), Georgia (USD 750m), Hungary (USD 25.1bn), Latvia (EUR 7.5bn), Romania (EUR 20bn), Serbia (EUR 3.0bn), and Ukraine (USD 16.4bn). In some cases these agreements have been done in combination with support from the World Bank, the European Union and the European Bank for Reconstruction and Development. Currently Turkey isFri, 17 Apr 2009 13:21:26 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-04-17.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-04-03.htmlThe result of the G20 meeting was a welcome surprise for emerging markets and we have seen most emerging markets rise on the back of the news coming out of the G20 meeting. We think that three factors in particular are helpful for emerging markets in general and for Central and Eastern Europe in particular: The G20 have agreed to quadruple the IMF's financial capacity with a USD1trn commitment. International trade should get a boost from new funds to trade finance and trade credits. The G20Fri, 03 Apr 2009 12:14:50 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-04-03.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-03-27.htmlLess than a month ago the Latvian government collapsed, while over the last week the Hungarian Prime Minister effectively resigned and the Czech government was ousted after a no-confidence vote in parliament. Naturally, this has raised concerns in markets that this instability is turning into a regional trend. There is little doubt that the significant deterioration of the economic and financial situation across the region is adding to political uncertainty, as the public is increasinglyFri, 27 Mar 2009 12:48:45 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-03-27.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-03-20.htmlWe have long argued that large external imbalances in a number of CEE economies would ultimately lead to a sharp drop in economic activity and a hard landing for some countries in the event of a "sudden stop" to external funding of the region's economies. Unfortunately, we have been seeing this played out in recent months. Hence, with the external funding of the CEE economies "drying" up, a sharp correction in their external imbalances is a foregone conclusion. This correction can basicallyFri, 20 Mar 2009 14:00:30 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-03-20.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-03-13.htmlThe Turkish economy has deteriorated dramatically over the last six months and judging from, for example industrial production, one could be led to believe that this crisis is at least as bad as the Turkish crisis of 2001-2 given the fact that the drop in economic activity is now larger than it was in 2001-2. However, it would be wrong to draw this conclusion as the reason for the present drop in economic activity is decisively different. While the 2001-crisis was created domestically withFri, 13 Mar 2009 13:49:25 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-03-13.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-03-06.htmlRecently policymakers across Central and Eastern Europe have become very active in verbally intervening in the CEE markets. Again and again policymakers have stressed that there are differences in fundamentals and economic conditions across the region. We fully agree with this. There is no doubt that countries such as the Czech Republic and Poland have better - even significantly better - fundamentals than for example Ukraine, Bulgaria, Romania, Hungary and the Baltic States. That said, thisFri, 06 Mar 2009 13:22:43 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-03-06.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-02-27.htmlThe deepening of the financial sector in central and eastern Europe (CEE) over the past two decades has to a large extent been driven by western European banks' willingness to set up subsidiary banks in the region and provide the means for a lending boom. High lending growth was accompanied by strong economic growth, but also by increasingly visible bubbles in the property markets. Now that the bubbles are bursting and the global economic crisis is hitting the CEE countries, there is expectedFri, 27 Feb 2009 17:17:56 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-02-27.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-02-20.htmlThis week the crisis in the CEE markets has intensified dramatically after the publication of a number of reports putting a negative focus on Western European banks' exposure to the overly leveraged CEE economies. The crisis is clearly developing in an explosive fashion and there is a very clear risk of an Asian crisis style meltdown. The economies in the region are already in free fall, and at least one country - Ukraine - is dangerously close to sovereign default. Rapidly rising concernsFri, 20 Feb 2009 14:40:41 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-02-20.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-02-13.htmlIn recent months inflation has come down relatively sharply across Central and Eastern Europe (CEE) on the back of falling commodity prices and the sharp deterioration in growth. However, numbers for inflation in January in a number of CEE countries indicate that inflation may not be falling quite as fast as we - and many others in the market - have expected. Inflation surprised on the upside in January in Romania, Latvia, Lithuania, the Czech Republic and Poland. For Romania, the CzechFri, 13 Feb 2009 15:18:56 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-02-13.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-02-06.htmlAs the recession hits across the central and eastern European economies the impact on the labour markets are increasingly visible and unemployment is now beginning to rise across the region. With growth well below trend growth in all CEE economies unemployment is now starting to rise across the region. That said, the rise in unemployment has until now been relatively modest as unemployment is a relatively lagging indicator for the state of the economy. As the deterioration in CEE did notFri, 06 Feb 2009 14:28:32 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-02-06.htmlhttp://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-01-30.htmlThe outlook is grim for the Central and Eastern European economies. The latest data confirms that the manufacturing sector in CEE has taken a massive beating and unemployment is now starting to rise sharply across the region. Rising unemployment is likely to hit private consumption hard in most countries in the region. So the overall picture for growth remains very negative. We now expect most countries in the region to see negative GDP growth. The situation in CEE bears many similarities toFri, 30 Jan 2009 11:35:59 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/new-europe-weekly/2009-01-30.html