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.

AUD/USD flirts with 0.7000, lowest since early August amid bullish USD

AUD/USD hits a fresh low since early August during the Asian session on Friday and looks vulnerable near 0.7000 after breaking below the 200-day SMA overnight. Against the backdrop of the hawkish Fed, a two-day rally in oil prices revives inflation fears and continues to push US bond yields to multi-year highs. Adding to this, geopolitical risks lift the US Dollar to a two-month high, overshadowing RBA rate hike bets and weighing on the pair.

USD/JPY pulls back from three-week high after failing near 159.00

USD/JPY edges lower during the Asian session on Friday, stalling its recent strong move to a three-week high of 159.00 as Japanese Yen bears turn cautious amid intervention fears. Meanwhile, the US Dollar retains a strong bullish undertone as the Fed's hawkish outlook and oil-driven inflation fears continue to push US bond yields to multi-year peaks. Furthermore, the BoJ's dovish rate hike last week might cap JPY and support spot prices.

Gold eyes worst week in a month amid hawkish Fed outlook

Gold is extending Thursday’s late rebound from the weekly low of $4,244 into Asia on Friday, but remains below $4,300. The bullion is headed for its worst week in four weeks amid a hawkish US Federal Reserve outlook and deepening global bond rout.

Crypto exchange Bitget hacked for over $350 million

Cryptocurrency exchange Bitget has been hacked for over $351 million after attackers compromised a few of its hot wallets. The hack was first flagged across several onchain tools, which initially noted over $180 million in assets moving from a few of the exchange's wallets to unidentified addresses.

Treasury announces second oversized bond buyback as it tries to put a lid on yields

The Treasury Department will buy back another $6 billion in long-term Treasuries as it continues efforts to tamp down rising yields. Treasury Secretary Scott Bessent announced this second expanded buyback on Wednesday.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.