On the radar
-
Polish central bank kept the policy rate unchanged at 5.75%.
-
In Czechia, unemployment rate increased to 3.7% in December.
-
In Slovakia, trade surplus narrowed to EUR 288.2 million while in Croatia trade deficit reached EUR 1349.
-
Today in the morning industrial output growth will be released in Slovakia and Slovenia.
Economic developments
Retail sales have been recovering across the region. Initially, in Croatia and Romania, retail sales growth dynamics never turned negative in 2023. In 4Q23, the sector also expanded in Poland and Serbia after three quarters of contraction. Although retail sales growth remained negative in other CEE countries, the improvement is notable as inflation eases, and monetary conditions are not as tight as before. We believe the positive trend will continue in 2024 as real wage growth is expected to become positive in the entire region, supporting private consumption. Tight labor market conditions also support consumer confidence. Additionally, the expected decline in inflation and interest rate cuts should help economic activity recover.
Market developments
On Tuesday, the Polish central bank kept the policy rate unchanged at 5.75%. Multiple declarations from the Council members suggest that a rate reduction is not expected anytime soon. From the press release, it seems clear that the NBP is content with the current path of inflation. However, the medium-term outlook is still uncertain due to factors such as fiscal and regulatory policies, and the pace of economic recovery. Today, Governor Glapinski will hold the press conference. Meanwhile, in Czechia, board member Prochazka said the central bank will remain cautious with monetary easing, as the bank board expects inflation to be higher compared to the central bank's forecasts. In Hungary, the budget gap was HUF 4.59 trillion (5.9% of GDP), which was twice as high as initially planned in 2023. This year, the budget deficit target is set for 2.9% of GDP, but Economy Minister Nagy has already questioned it. Our forecast suggests much milder consolidation this year, as we see the government budget balance at -4.4% of GDP.
This document is intended as an additional information source, aimed towards our customers. It is based on the best resources available to the authors at press time. The information and data sources utilised are deemed reliable, however, Erste Bank Sparkassen (CR) and affiliates do not take any responsibility for accuracy nor completeness of the information contained herein. This document is neither an offer nor an invitation to buy or sell any securities.
Recommended Content
Editors’ Picks
AUD/USD: Outlook is still bearish below 0.6630
AUD/USD extended its gains from Wednesday, supported by continued selling pressure on the US Dollar. However, weak performance in the commodities market and disappointing Chinese PMI data limited the Australian dollar's upward potential.
EUR/USD extends upside above 1.0850, with all eyes on US NFP data
The EUR/USD pair extends the rally to 1.0885 during the early Asian session on Friday. The uptick of the major pair is bolstered by the weakening of the US Dollar. All eyes will be on the US Nonfarm Payrolls, which is due later on Friday.
Gold retreated sharply, trades around $2,740
Prices of Gold trade markedly on the defensive on Thursday following a marginal uptick in the Greenback and declining US yields. Despite the daily pullback, the yellow metal is anticipated to remain bolstered by steady uncertainty pre-US election.
Maker Price Forecast: MKR could stage 40% rally
MakerDAO is up 2% on Thursday and could be set for a 40% rise in the coming weeks if it successfully maintains an extended move above the descending trendline of a falling wedge. On-chain data also supports the bullish outlook after a four-month-long decline.
Bank of Japan holds rates steady amid signs of modest GDP growth
Monthly industrial production results have been mixed but generally indicate a modest recovery in third-quarter GDP. Clear guidance from the Bank of Japan remains elusive, with each upcoming meeting being pivotal.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.