CEE: Romania’s central bank on hold

The Romanian central bank meeting will be the key event this week in CEE. Although we do not expect any change, the Romanian economy slowed visibly at the end of 2025, while inflation remains elevated. January’s inflation will be another release drawing attention, not only in Romania, but also in Slovakia and Serbia. Slovenia is scheduled to publish its 4Q25 flash GDP estimate on Monday, while on Thursday, Poland will be in the spotlight. January’s performance of industry will be published. On top of that, producer prices, employment and wage growth figures will be released. Labor market data is due in Croatia, Hungary and Slovakia at the end of the week.

FX market developments

After a strengthening wave at the beginning of the last week, CEE currencies weakened last Friday. In Hungary, the easing inflation in January has opened speculation about monetary easing as early as February, likely leaving a mark on the currency. News about the EU court's opinion advising scrapping the release of more than EUR 10bn in funds for Hungary could also affect the EURHUF development. In Poland, a broad consensus is being formed regarding monetary easing happening in March. Although inflation surprised to the upside in January (2.2% y/y), we believe that new growth and inflation projections will still support interest rate cuts. Several statements from the central bank clearly show the willingness to lower interest rates at the next meeting. This week, the Romanian central bank is to hold a rate-setting meeting, and no change is broadly expected. Fiscal consolidation has left its mark on the economy (0.1% y/y growth in 4Q25) and inflation. The timing of the first cut remains open at this point.

Bond market developments

Last week, 10Y LCY government bond yields in CEE declined by roughly 10bp w/w. Poland’s 10Y benchmark yield fell below 5% for the first time since 2022. The release of low January inflation figures in several CEE countries appears supportive of further rate cuts. Romania’s GDP data disappointed, pushing the entire ROMGB yield curve below the HGB curve. Slovakia accessed international debt markets for the first time in 2026, issuing a EUR 2bn 20Y Eurobond at a spread of 110bp over mid-swaps. With demand reaching EUR 8.6bn, it was Slovakia’s second-largest order book ever and the largest for a longer-dated 20Y bond. This week, Slovakia will continue its regular monthly auction schedule by reopening SLOVGBs 2031, 2033, 2036 and 2037. Romania will reopen ROMGBs 2028, 2031 and 2040. Hungary and Poland will offer a range of bonds as well, while Hungary will additionally issue T-bills.

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