CEE: Central banks meetings

There are three central bank meetings in the region. On Wednesday, the central banks of Poland and Romania hold rate-setting meetings. While in Romania, no change in the interest rate is expected anytime soon, in Poland, there is less certainty after September’s flash inflation at 2.9% y/y. In Serbia (interest rate decision due Thursday), stability of rates is broadly expected. The inflation rate will be published in Czechia and Hungary and producer prices will be released in Serbia and Croatia. Other than that, the performance of the retail sector as well as industry in August will be released in several CEE countries (Czechia, Hungary, Slovakia and Slovenia). Finally, trade data is scheduled for release in Czechia and Slovakia. On Friday, after the market closes, S&P will review its ratings and outlooks for Hungary and Romania, while Moody’s will review Slovenia’s rating and outlook. &nbsp.

FX market developments

CEE currencies strengthened against the euro last week. In Hungary and Czechia, local factors support such a development. In Czechia, some volatility in the aftermath of parliamentary elections may appear at the beginning of the week. As for global influence, the key news was that, in the US, the government’s first shutdown in nearly seven years had been triggered. This week, there are three central bank meetings, but there is uncertainty regarding the decision only in Poland. The market is split on whether Poland’s central bank will cut the interest rate in October (September’s inflation was lower than expected) or wait until November (when new inflation and growth projections will be published).

Bond market developments

Local currency CEE government bond yields stagnated or edged slightly lower last week, in line with declining yields on major global markets. Romania returned to international markets, issuing three Eurobonds with maturities of 7, 12, and 20 years, raising a total of EUR 4bn. The bonds were priced at spreads of MS+295, MS+345, and MS+370 basis points, respectively. It appears that Romania has completed its international issuance for the year. With the recent strong demand at domestic bond auctions, the Ministry of Finance is expected to concentrate on local debt issuance for the remainder of 2025. This week, Romania will reopen ROMGBs maturing in 2028, 2034, and 2040. Czechia will reopen CZGBs maturing in 2034 and 2035, along with a 13-year floating-rate note. Treasury bills will be offered in Czechia, Hungary, Romania, and Slovenia, with the latter offering four different maturities. 

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