Intra-EU travel leads in CEE region

Erste Bank Research Team Erste Bank

On the radar

Inflation rate in June landed at 4.3% y/y in Slovakia, at 4.1% y/y in Poland and at 3.7% y/y in Croatia.
Wage growth in Hungary was released at 7.8% y/y in May.
Producer prices in industry declined by 0.7% y/y in Czechia during June.
Poland will release data on core inflation in June.

Economic developments

Summertime enhances us to look at travel destinations. EU residents made 1.1 billion tourism trips involving at least 1 overnight stay in 2023. Nearly three quarters (72.8%) of these trips were domestic. Most foreign trips were elsewhere within the EU (20.0% of all trips) and the remainder (7.2%) were to non-EU countries. In the region, domestic trips dominate in Romania and Poland. In Romania it is as much as 90% of trips for at least one night. In the case of foreign trips, majority of them are within the EU. Further, we look at longer stays that are for four nights or more. While overnight stays for at least 1 night may be predominantly business trips, longer stays may tell a bit more about leisure destinations. Trips for at least four nights consist roughly 40% of all trips (from 36% in Slovenia to as much as 49% in Poland). In Hungary, Slovenia and Slovakia most of the longer trips are foreign (within EU or beyond), in rest of the region domestic destinations dominate, with Romania having again the highest share of domestic trips for at least four nights, followed by Poland and Croatia.

Market developments

Fitch reiterated that Romania’s deficit reduction and debt stabilization are key for the sovereign rating. The updated fiscal forecasts will be known at scheduled sovereign rating review on 15 August. Fitch notes that the total impact of fiscal consolidation package is evenly balanced between revenue and expenditure measures and that political risks have eased. Polish Prime Minister Donald Tusk’s cabinet will be reshuffled next week. Serbia will raise the minimum wage by 9.4% as of October for the second time this year according to the Ministry of Finance. Following the release of US inflation FX and the bond market remained rather steady in the region. EURCZK is at 24.67, EURHUF close to 400, EURPLN at 4.26 and EURON holds at 5.07.

Download The Full CEE Macro Daily

Author

Erste Bank Research Team

Erste Bank

At Erste Group we greatly value transparency. Our Investor Relations team strives to provide comprehensive information with frequent updates to ensure that the details on these pages are always current.

EUR/USD holds lower ground near 1.1850 ahead of EU/ US data

EUR/USD remains in the negative territory for the fourth successive session, trading around 1.1850 in European trading on Friday. A broadly cautious market environment paired with modest US Dollar demand undermines the pair ahead of the Eurozone GDP second estimate and the critical US CPI data.

GBP/USD keeps losses around 1.3600, awaits US CPI for fresh impetus

GBP/USD holds moderate losses at around 1.3600 in the European session on Friday, though it lacks bearish conviction. The US Dollar remains supported amid softer risk tone and ahead of the US consumer inflation figures due later in the NA session on Friday.

Gold trims intraday gains to $5,000 as US inflation data loom

Gold retreats from the vicinity of the $5,000 psychological mark, though sticks to its modest intraday gains heading into the European session. Traders now look forward to the release of the US consumer inflation figures for more cues about the Fed policy path. The outlook will play a key role in influencing the near-term US Dollar price dynamics and provide some meaningful impetus to the non-yielding bullion.

US CPI data set to show modest inflation cooling as markets price in a more hawkish Fed

The US Bureau of Labor Statistics will publish January’s Consumer Price Index data on Friday, delayed by the brief and partial United States government shutdown. The report is expected to show that inflationary pressures eased modestly but also remained above the Federal Reserve’s 2% target.

A tale of two labour markets: Headline strength masks underlying weakness

Undoubtedly, yesterday’s delayed US January jobs report delivered a strong headline – one that surpassed most estimates. However, optimism quickly faded amid sobering benchmark revisions.

Solana Price Forecast: Mixed market sentiment caps recovery

Solana (SOL) is trading at $79 as of Friday, following a correction of over 9% so far this week. On-chain and derivatives data indicates mixed sentiment among traders, further limiting the chances of a price recovery.