Central banks in Serbia and Poland on hold
There are two central bank meetings scheduled in Serbia and Poland. We expect stability of rates in both countries. We will also get to see a series of inflation releases. However, only in Romania and Hungary will the December headline be seen for the first time. In other countries, the final release with details will be provided. Other than that, the performance of the industry sector will be published in Hungary and Romania, while Czechia will release retail sales growth in December. Finally, several CEE countries will show their current account and trade data.  
FX market developments
At the beginning of the year, the CEE currencies have been weakening against the euro. The EURCZK moved up to 25.30, fueled by lower-than-expected inflation in December, which has started the building-up of expectations for a rate cut in 2026. The EURHUF ended the week around 385 and the EURPLN at 4.21. This week, Serbia and Poland’s central banks are expected to remain on hold. In Serbia, it is too early for any decision regarding the interest rate level, although the situation around NIS is getting more stable. In Poland, central banker Ireneusz Dabrowski suggested there is a chance for an interest rate cut at the upcoming meeting after December’s inflation development. We stick to our call for stability of rates, however.
Bond market developments
CEE bond markets started the year on a strong note. Last week, 10Y LCY government bond yields declined by 10–20bp, supported by market expectations of lower interest rates. Since mid-December, FRAs have fallen sharply in Czechia and Hungary. In the latter, this was driven by a shift in the MNB’s communication, which suddenly turned more dovish. CEE countries have also begun their foreign issuance in EUR, with Slovenia the first to tap international markets. It issued EUR 1.75bn in 10Y Eurobonds. Hungary followed with EUR 2bn via a 7Y Eurobond and EUR 1bn in a 12Y green bond. Poland raised EUR 3.25bn through a dual-tranche Eurobond (5Y + 10Y). We expect more countries to access international markets in the coming weeks, as 1Q is typically the busiest period for foreign issuance. However, overall foreign issuance this year is likely to be lower, as CEE countries aim to utilize cheaper loans from EU programs (RRF/SAFE). For more details, please refer to our Bond Report, which will be distributed today.
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.
