CEE: Mix of data in the region

A mix of data will be released across CEE this week. Current account balances will be published in Poland, Romania, Serbia and Slovakia. Further, final inflation numbers for June will be released in Slovakia, Poland and Croatia. In Romania, industrial output growth in May is due Tuesday and that will allow us to summarize the performance of industry in the second quarter of 2025 in all CEE countries. Finally, wage growth and the unemployment rate will be released in Slovakia and producer prices growth in Czechia. On Friday, after market close, Moody's is scheduled to release its rating review for Czechia. We expect no change in the rating and outlook.

FX market developments

The FX market in the region was relatively stable throughout the week. The Polish zloty and Romanian leu remained marginally weaker against the euro. On global markets, President Donald Trump said the US would begin levying a 50% tariff on copper imports from August. He also signed an executive order delaying increased tariffs until August 1. The European Union is trying to lock the tariffs at 10%. Locally, we adjusted the interest rate outlook in Romania and Serbia (both central banks voted for stability of rates in July). In Romania, we see the first rate cut only in 2026, while in Serbia (given the surprising decision to keep the interest rate stable at 5.75% at July’s meeting), we expect only one interest rate cut toward the end of the year. In Czechia, inflationary developments support a stability of rates scenario until the end of the year, and it was also communicated by the central bank that tight monetary conditions should prevail.

Bond market developments

Romania’s government passed the fiscal consolidation package that satisfied both investors (decline in yields and risk premium) and the European Commission, thereby sustaining the flow of EU funds (which could have been suspended in the event of disappointing fiscal measures). The government took the opportunity of the positive sentiment and tapped the international bond market, selling USD 5.6bn (dollar-denominated maturing in 2030 and 2036 and euro-denominated due in 2039) and enjoying strong demand from investors. Romania also issued local government papers maturing in 2030. Long-term yields in Romania continued to decline, while in other CEE countries, bond market performance was mixed. In Poland, the Ministry of Finance sold local currency papers, meeting strong interest from investors. Poland already has 80% of this year’s financing needs completed. This week, Czechia, Romania and Poland will be active on the bond market. Czechia and Hungary plan to issue T-Bills as well.

Download The Full CEE Market Insights