CEE: The world food price index on the rise

Erste Bank Research Team Erste Bank

On the radar

Moody’s affirmed Romania’s Baa3 sovereign rating, with the negative outlook maintained.
Today, Romania’s central bank holds a rate setting meeting.
At 8 AM CET Romania releases trade date.
Slovakia (9 AM CET) and Slovenia (10.30 AM CET) will publish industrial output growth.
Czechia releases share of unemployed at 9 AM CET.

Economic developments

Combination of adverse weather conditions and geopolitical risks as well as stronger energy-related demand make us look at the World Food Price Index development. It reached 131.1 points in July, compared with 124.5 in December 2025, corresponding to a cumulative increase of 5.3% since the beginning of the year. The recent increase points to some renewed pipeline pressure on consumer food inflation. If the World Food Price Index remains close to 131, the contribution to inflation is expected to be positive in roughly one year horizon. The pass-through into consumer prices is likely to be partial and delayed, however. Further, with the overall index only around 1% higher than a year earlier, the development currently represents a moderate upside risk to food inflation rather than a renewed shock comparable with 2022.

Market movements

Moody's reaffirmed Romania's Baa3 rating with a negative outlook, citing political risks around fiscal consolidation while projecting the 2026 budget deficit to narrow to 5.8% of GDP. Romania’s Finance Minister Alexandru Nazare said maintaining the country’s investment-grade sovereign rating will depend on the swift formation of a credible government with full powers, the completion of key milestones under the National Recovery and Resilience Plan and the adoption of a sustainable 2027 budget that demonstrates continued fiscal consolidation. Today, Romania’s central bank will announce interest rate decision, and no change is broadly expected. Last week, 10Y government bond yields declined across CEE, with Romania being the only exception. CEE currencies weakened slightly over last week, as uncertainty surrounding the situation in the Middle East contributed to higher oil price volatility. As for other news, President Vučić announced snap elections will be held within three months, likely in October or November, pledging to accept the outcome.

Download The Full CEE Macro Daily

Author

Erste Bank Research Team

Erste Bank

At Erste Group we greatly value transparency. Our Investor Relations team strives to provide comprehensive information with frequent updates to ensure that the details on these pages are always current.

GBP/USD treads water around 1.3400 as Hormuz risks lift USD

GBP/USD trades with caution around 1.3400 in European trading on Monday, away from an over three-week high, or levels just above the 1.3500 psychological mark touched on Friday. The pair faces headwinds from a modest US Dollar rebound as investors rush to safety amid renewed jitters on the reopening of the Strait of Hormuz and US-Iran talks.

EUR/USD consolidates below 1.1600 amid Mideast tensions

EUR/USD kicks off the new week on a subdued note and trades below 1.1600 in the European morning on Monday, well within striking distance of a fresh high since June 17, touched in reaction to the disappointing US jobs data on Friday.

Gold climbs back to $4,350; remains below June 17 high

Gold reverses a modest intraday dip, and climbs to the top boundary of its daily range, closer to the $4,350 level heading into the European session. The commodity, however, remains below its highest level since June 17, touched on Friday, following the release of the US Nonfarm Payrolls report.

Cardano: Bulls eye a second leg higher as whales buy

Cardano trades above $0.196 at the start of the week after posting double-digit gains over the past two weeks. ADA’s bullish price action is supported by steady whale accumulation. Meanwhile, derivatives sentiment is showing a slight bullish tilt, suggesting a second leg higher for ADA.

The hottest trade of 2026 has a problem

The carry trade has been one of the biggest winners of the year, helped by low volatility, wide interest-rate gaps, and a relatively stable dollar. But now, parts of that setup are starting to crack.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.