The sentiment indicators improve in CEE

Erste Bank Research Team Erste Bank

On the radar

Fitch Ratings affirmed the sovereign ratings of Croatia, Czechia, and Romania.
Today, PMI data will be released in Czechia, Hungary, Poland, and Romania.

Economic developments

The latest business and consumer survey data published by the European Commission at the end of last week point to an improvement in economic momentum across the CEE region at the start of Q3 2026. The rise in the Economic Sentiment Indicator (ESI) was driven primarily by a strong rebound in consumer confidence, which appears to have recovered from the shock caused by the military conflict in the Middle East. Average consumer confidence across the CEE8 reached a five-year high, partly supported by exceptionally strong sentiment in Hungary, where consumer confidence climbed to its highest level since 2018. Given the heightened volatility in fuel prices during July, however, it remains to be seen whether the August data will confirm the recent improvement in sentiment or reveal a setback.

Market movements

The Hungarian forint weakened by 0.8% against the euro on Friday, negatively affected by news that the Paks nuclear power plant will temporarily halt electricity production due to low water levels in the Danube River. The outage is expected to pose challenges for the electricity grid, and several large companies have already been asked to significantly reduce their electricity consumption in recent days. Fitch Ratings' decision to affirm the sovereign ratings of Croatia, Czechia, and Romania, published on Friday, was in line with our expectations. However, the report on Romania contained some important information suggesting that the country only narrowly avoided a rating downgrade. The next rating review of Romania by Moody's is scheduled for this Friday.

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.

AUD/USD bulls seem hesitant below 0.7050 ahead of RBA on Tuesday

AUD/USD reverses an Asian session dip on Monday as renewed optimism over Iran diplomacy boosts investor confidence, keeping a lid on the safe-haven US Dollar and supporting the risk-sensitive Aussie. Spot prices, however, remain below the one-month high, touched last Thursday, as bulls wait for the crucial RBA decision before taking fresh positions.

USD/JPY climbs to 158.00 neighborhood as BoJ uncertainty weighs on the JPY

The USD/JPY pair gains some positive traction at the start of a new week, recovering further from Friday's post-Bank of Japan (BoJ) swing low to sub-157.00 levels. The momentum lifts spot prices to the 158.00 neighborhood during the Asian session and seems unaffected by fresh intervention warning from Japan's Finance Minister Satsuki Katayama.

Gold trims intraday gains; trades below $3,900 as Fed hike bets counter weak USD

Gold trims part of its modest intraday gains, trading with a mild positive bias below the $3,900 mark during Monday’s early European session. The US Dollar attracts fresh sellers amid optimism over a potential diplomatic breakthrough to end the US-Iran war and offers some support to the commodity. Meanwhile, US Federal Reserve rate-hike bets remain firmly on the table amid energy-driven inflation concerns, keeping the non-yielding yellow metal near the October 2025 low touched on Friday.

Dogecoin risks deeper slide as whales diverge

Dogecoin hovers around $0.075 on Monday after falling for the fifth consecutive week since the end of September. Santiment data shows diverging whale activity, as large holders reduce their positions while smaller whale wallets accumulate tokens. Meanwhile, weakening on-chain metrics and a deteriorating technical outlook suggest that DOGE could remain vulnerable to further losses.

Middle East War updates: Iran warns of expanded strikes against US despite progress in talks

Here’s a brief recap of the key developments in the Middle East war that occurred over the weekend, which are expected to have a significant impact on markets in the upcoming week.

The 2% inflation target came from a throwaway remark. It now moves trillions

The Federal Reserve's 2% inflation goal grew out of an off-the-cuff remark by a New Zealand politician in 1988. Bond investors still price long-term US debt as if 2% holds, so a change in how the Fed measures inflation would move markets.