KBC Market Research Desk
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Forint gains the most in more than a year
The euro slumped not only against the US dollar on Wednesday. Both the forint and the zloty appreciated against the common currency as well; the zloty strengthened the most in about a month while the forint posted the largest daily gain in more than one year. Positive real interest rates clearly make Polish and Hungarian assets attractive to investors. This has also been confirmed by strengthening government bonds (10 year yields fell by 9 bps in case of Hungary and by 5 bps in case of Poland yesterday). The above mentioned attractiveness holds particularly for the zloty as the central bank indicated that the official interest rates would remain stable in months to come.
Regarding the Czech average real wages data released yesterday, though it fell short of market expectations, it still means that - after two years of real decline - wages grew in 2014. In the fourth quarter, the average wage increased by 1.8% (analyst consensus was 2.5%), mainly thanks to wage growth in public sector. The data thus confirmed that even though the economic recovery brings about a significant improvement in a labour market situation, falling unemployment is not being accompanied by more pronounced (upward) wage pressures. Let us recall that this has also been one of the key risks mentioned by the Czech National Bank as far as its outlook for inflation is concerned...
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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