KBC Market Research Desk
KBC Bank
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NBP to keep rates on hold
Hungarian industrial output rose by 5.8 % y/y
While the Czech koruna strengthened slightly yesterday to 24.45 EUR/CZK, its regional peers, the zloty and the forint, weakened. Recent forint´s weakness has been borne by expectations of further rate cuts (the next NBH meeting is scheduled for January 21). Although the NBH had proclaimed less aggressive monetary policy, yesterday´s data showing a meagre growth of industrial prices in November (+0.9 %) signal room for further monetary easing in spite of the US tapering. Unlike the NBH, the Polish central bank, whose meeting starts today, is not supposed to change its rates and no surprise statement has been expected to come from the press conference following the meeting, either. Hence the single issue that has remained veiled in uncertainty in Poland to date is the beginning of monetary tightening that, in our view, may come at the turn of the third and the fourth quarter this year.
Regarding today’s regional data, industrial output in Hungary has been published. According to the preliminary figures, industrial gross output rose by 3.5 % y/y in November, which lagged considerably behind the 6% growth in October. Adjusted for working days, the growth was higher, 5.8 %, but still below the consensus. In contrast to industry, retail sales rising by 4.9 % y/y in November meant a positive surprise. Altogether, fresh macro data did not provoke immediate forint reaction.
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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