KBC Market Research Desk
KBC Bank
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CEE currencies profit from Euro gains
NBP to leave rates unchanged
Yesterday, CEE currencies profited from better than expected PMIs as well as from Euro gains. Currency gains helped also local bonds. Yields of Hungarian government bonds fell by 8-14 basis points and also Polish bond prices rose ahead of tomorrow’s auction of 5Y government bonds. Political frictions in the US Congress have not reduced the global risk appetite so far; nevertheless we cannot rule out that uncertainty stemming from the US debt ceiling debate will adversely weigh on the CEE region in coming weeks.
Today, the National Bank of Poland (NBP) holds a regular rate-setting meeting where we expect it to leave rates intact. Poland´s GDP grew by estimated 0.8 % y/y in the second quarter of 2013 and forward-looking indicators also suggest that the economy bounced off the bottom. Moreover, industrial data confirm promising start of the third quarter and certain (though only moderate) improvement can be seen also in retail sales. The softest spot in the Polish economy thus continues to be construction. We expect that the NBP leaves rates at their all-time low till the end of the year and the first move (upwards) occurs late in the first half of the next year at the earliest.
This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.
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