KBC Market Research Desk
KBC Bank
Regional Overview
Macro, FX & Rates: CE currencies continue to ease
(CE currencies) Regional currencies including even the Czech koruna has continued to ease. It is hard to find a particular reason the recent weakness of CE currencies, but it seems that global fears that interest rates will be still heading up in core markets (especially in the US) could be behind the recent modest sell-off. Hence, we think that until US interest rates and yields stabilize at some levels, CE currencies will probably stay under selling pressure. Actually, this could be the case until the next FOMC meeting scheduled on December 14th, while another important event for regional forex markets will be definitely the ECB on December 8th. In this respect, the upcoming domestic eco releases (like today's Polish inflation for instance) might play even less important role in trading.
Equities: MSCI rebalancing after the close today
(CE) MSCI rebalancing is due today after the market session (effective as of Dec 1). In Poland – Enea and Energa to be excluded, while JSW will be newly added. As concerns Czech equities - O2CR kept its slot in the MSCI Czech Republic Index while Moneta was added expanding the number of Czech constituents from three to four. As a result of increasing the number of constituents, weight of each is expected to decline with CEZ having 38% (down from 47%) followed by KB with 36% (down from 44%), Moneta with 19% and O2CR down to 7% from 9% in our view. We expect higher volumes during the day and especially in the auction.
Preview: Polish inflation back from negative territory
(PL) The annual rate of inflation in Poland according to our estimates was probably zero year-on-year in November. This means that prices did not decline year-on-year for the first time since July 2014. It was related, particularly slightly rising food prices and inflation in non-negative values, was helped perhaps by annually rising fuel prices. They were also a major plus compared to October and so prices month-on-month rose by 0.1 % mainly due to more expensive crude oil (and a weaker zloty).
| LAST | PREVIOUS | CHANGE (%) | |
| EURCZK | 27.06 | 27.06 | 0 |
| EURHUF | 311.4 | 311.8 | -0.15 |
| EURPLN | 4.437 | 4.435 | 0.03 |
| LAST | PREVIOUS | CHANGE (bps | |
| CZGB 10Y | 0.498 | 0.499 | -0.1 |
| HUGB 10Y | 3.4 | 3.39 | 0.3 |
| PLGB 10Y | 3.58 | 3.58 | 0 |
| LAST | PREVIOUS | CHANGE (%) | |
| PX | 879.3 | 879.3 | 0 |
| BUX | 29816 | 29816 | 0 |
| WIG | 48199 | 48199 | 0 |
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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