Ukraine support tracker

Erste Bank Research Team Erste Bank

On the radar

Inflation rate in Slovakia went up to 3.9% y/y in January.
There are no releases scheduled for today.

Economic developments

According to the latest update of the Ukraine Support Tracker, over the past 3 years of war, donor countries have provided support of about EUR 80 billion per year. Europe as a whole has clearly overtaken the US in terms of Ukraine aid. In total, Europe has allocated EUR 70 billion in financial and humanitarian aid as well as EUR 62 billion in military aid. This compares to EUR 64 billion in military aid from the US as well as EUR 50 billion in financial and humanitarian allocations. Within Europe, in absolute terms, Germany is the single most important donor, providing EUR 17 billion in total, closely followed by the UK with EUR 15 billion and Denmark with EUR 8 billion. If scaled for the country’s GDP, then the Baltic and Nordic states have allocated the highest share of aid as a percentage of their pre-war GDP. Within the region Poland, Slovakia and Croatia have allocated the most within the CEE region. Hungary, on the other hand, barely 0.03% of GDP.

Market movements

The Hungarian forint and the Polish zloty have appreciated on Monday, while long-term yields declined everywhere but Poland and Slovenia. Romania sold RON 676.7 of 2027 local currency bonds with solid demand as bid-to-cover ratio was at 1.53. Slovakia also successfully sold a range of government papers with bid-to-cover ratio close to or above 2. In Hungary the outgoing policy maker Pleschinger said there is no room for Hungarian central bank to cut key policy rate this year. Since March, Hungarian central bank will have new leadership.

As for global developments, French President Emmanuel Macron hosted fellow leaders in Paris Monday. Even though joint bonds weren’t specifically addressed, Polish Prime Minister Donald Tusk said new funding measures would be presented in time for an upcoming March 20-21 summit.

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 hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.