CEE: Inflation data and rating reviews in focus

This week in CEE

This week’s CEE economic calendar begins with Romania’s July industrial production, where we expect a moderate positive monthly evolution, supported by confidence indicators and external demand, translating into a y/y increase of around 3% (partially thanks to the lower base effect). Poland and Croatia will publish final August CPI figures the same day. On Tuesday, attention turns to Czechia’s August PPI, where we expect a decline of -0.9% y/y (survey: -0.83%), driven by lower oil prices, while Slovakia’s CPI is projected at 4.2% y/y, with services contributing about half of the price growth. Wednesday brings Serbia’s July current account data, followed by a busy Thursday in Poland, where industrial production is expected to show only marginal growth, while PPI should remain in negative territory and wage growth stays below 8% y/y. Finally, on Friday, labor market indicators will dominate, with Slovakia’s unemployment rate seen as slightly higher, at 5.1%, while Croatia’s jobless rate is expected to remain low at 4.1%, with wage growth also released. Finally, Slovenia will release August PPI, projected at 1.1% y/y. On Friday, after business hours, Poland will receive a rating update from Moody’s, where we see a negative outlook change as a possibility, especially following Fitch’s revision. Moreover, Moody’s will also review the rating for Serbia, where no change is expected.

FX market developments

Over the past week, CEE currencies showed limited movement against the euro. The Czech koruna and Hungarian forint appreciated by approx. 0.5% w/w, while the Polish zloty recorded slight depreciation. Part of these currency fluctuations can be attributed to market reactions following the ECB’s recent decisions and domestic central banks’ statements, whereas the zloty could remain under pressure from Fitch’s negative outlook revision announced last Friday. On Thursday, the National Bank of Serbia kept its policy rate unchanged at 5.75%, signaling a cautious stance amid uneven inflationary pressures. The decision reflects a careful balance: maintaining a restrictive monetary policy to mitigate inflation risks while relying on regulatory measures to address food-related price shocks. After market close on Friday September 12, Moody’s affirmed Romania’s sovereign rating with a negative outlook, while S&P also left Croatia’s rating unchanged.

Bond market developments

Long-term 10-year yields declined over the past week in Croatia, Romania, Hungary, and Slovakia, with the largest drop observed in Croatia at approx. 8bp. In contrast, Polish yields edged higher. On the primary market, Czechia issued CZECHGBs maturing in 2030, 2032, and 2040, achieving average yields of around 4% for shorter maturities and 4.67% for the 15-year bond. Romania also tapped the market, placing bonds with yields in the range of 7.5–7.6% for maturities between 5 and 15 years. Poland offered instruments across the curve, from 10-month bills to 10-year bonds, with yields between 4.3% and 5.5%. In Hungary, T-bills were issued at around 6.1%, while 6-year bonds priced near 6.7%. Looking into this week, Romania plans to issue T-bills and reopen its 2029 and 2033 bonds. Slovakia will reopen bonds maturing in 2033, 2035, 2036, and 2043, while Czechia will reopen its 2038 issue. Serbia is set to offer a 2035 bond, Hungary and Croatia will issue T-bills, and Poland is also expected to return to the market with bond offers.

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