Annika Lindblad is based in Nordea Markets' Helsinki office and is responsible for the analysis, forecasting and commenting on the Baltic economies. She also works closely with her Nordic colleagues to provide Finnish customers with the latest information on Emerging Markets and has a special interest in Eastern European economies, particularly Russia which she follows closely.
Annika graduated from the University of Helsinki with a Master in Political Science (Economics) and has been with Nordea since 2008.
The credit rating upgrade by Moody's to investment grade is of course good news and a significant step for Turkey. However, a credit rating upgrade raises expectations of further capital inflows. This puts further strengthening pressure on the TRY and more pressure on the CBRT to control it, until the economic outlook brightens.
Venäjä ja öljy kuuluvat erottamattomasti yhteen. Energiasektori on Venäjän talouden kulmakivi. Öljyn hinnan viimeaikainen lasku onkin herättänyt uusia huolia Venäjällä talouden hiipuvasta vedosta.
The Czech central bank unsurprisingly kept the policy rate unchanged at 0.05%. The risk of FX interventions was played down a little, as expected. Interventions will only be seriously on the table if the threat of deflation intensifies. A weak CZK is here to stay - for a while, at least.
The Hungarian central bank cut its policy rate for the ninth consecutive meeting in line with expectations. The risks remain tilted towards further cuts, but it all depends on the HUF and inflation developments.
The preliminary HSBC/Markit manufacturing PMI for China was a disappointment, falling from 51.6 to 50.5 in April. This does not change our expectations of a gradually recovering Chinese economy, but is a sign of China adapting to a lower growth environment.
The Turkish central bank surprised with a 50bp interest rate cut (consensus -25bp). The interest rate action today is a clear sign that the central bank continues to prefer a weaker/stable TRY at the moment, and is more worried about modest growth than accelerating inflation.
China’s sluggish Q1 GDP growth weakens expectations that the global recovery had gained strength at the beginning of the year. Nevertheless, credit growth picked up steam in March, which raises expectations of accelerating growth in Q2.
Vahva luottokasvu tukee odotuksia piristyvästä talouden aktiviteetista Kiinassa ja on linjassa reilun 8 prosentin kasvuennusteemme kanssa.
Domestic demand was the main drag on growth last year. Q4 is, however, luckily already history, and looking forward the Turkish economy seems in a better position. S&P raised the country's credit rating last week, but kept it below investment grade. A widening CA deficit is the largest risk for further ratings upgrades.
The Czech central bank kept the key rate unchanged at 0.05%, as expected. The already weak CZK limits the need for looser monetary policy at the moment. Nevertheless, governor Singer reiterated that the central bank is ready to loosen monetary policy through FX interventions.
No surprises here – Hungary cut its base rate for the eighth consecutive time by 25bp, bringing it down to a record-low 5.00%. Further interest rate cuts are possible, but they depend on inflation pressure and financial market uncertainty. No signs of unconventional monetary policy measures, which should help to firm HUF.
CBRT kept the benchmark one-week repo rate and the overnight borrowing rate unchanged. However, they decided to cut the O/N lending rate to 7.50% (from 8.50%). This is a fine-tuning move to monetary policy, and we rather see scope for tighter policy going forward.
Spekulaatiot rahapolitiikan radikaalista keventämisestä käyvät kuumina Unkarissa. Odotamme tiistain kokouksesta koronlaskua, mutta päähuomio on uuden puheenjohtajan kommenteissa epätavanomaisita kevennyskeinoista. Pysyvään HUF:in heikkenemiseen ei ole varaa.
Kiinan kerran-kymmenessä-vuodessa vallanvaihdos on valmis. Vallanvaihdos ei kuitenkaan mullista maan politiikkaa, ja seuraavana vuosikymmenenä Kiinassa on edessä paljon haasteita ja tavoitteita.
The parliament expectedly nominated economy minister Matolcsy as central bank chief. The appointment increases the likelihood of unconventional monetary policy measures, although these are unlikely in the short term. With all the negative sentiment surrounding Hungary, don't forget the possibility of a positive surprise from a recovering Germany!
Kiinassahan teollisuus on talouden selvästi tärkein sektori ja palvelut vain pieni osa, eikö vain? Ei enää. Palvelusektori on Kiinassa lähitulevaisuudessa ajamassa tärkeydessä teollisuussektorin ohi.
The government of Latvia today submitted a request to the European Commission and the European Central Bank to evaluate the eligibility of Latvia to become a member of the euro area. This is another formal step on the road to …
No surprises here – Hungary cut its base rate for the seventh consecutive time by 25bp, bringing it down to 5.25%. The monetary policy stance is likely to remain loose in the coming months as well, especially as the current central bank governor steps down after this meeting. On top of rate cuts, unconventional monetary policy easing would not be a suprise.
One of the main events in Hungary this spring is the stepping down of current central bank chief Simor in early March. The next central bank chief will be someone who plays well with PM Orbán. The main risk is that the central bank will be ready to give up some of the focus on the inflation target in favour of boosting growth, thus undermining long-term credibility of the central bank.
It has become increasingly clear that there will be no new arrangement between Hungary and the IMF/EU. The encouraging market sentiment is helping Hungary meet its external financing needs without IMF support. However, an IMF package can be much more valuable than the cash itself through the discipline and accountability it introduces to economic policies.
The central bank action is aimed at limiting speculative capital inflows and restricting credit growth. The reserve requirement hikes will drain liquidity from the markets, while the rate cuts should dampen capital inflows and thus help limit TRY gains.
Dismal. The only word that properly describes Hungary’s GDP data today. Today’s weak GDP data and lower than expected inflation cements expectations of further rate cuts. Risks are certainly mounting for further easing beyond 5.25%.
The Czech economy continued on a dismal path, with GDP contracting 1.7% y/y in Q4. We expect the Czech economy only to pick up pace towards the end of the year, along with strengthening activity in the euro area.
Kun talous supistuu, inflaatio on maltillista ja markkinoilla odotetaan kyyhkymäistä sanomaa, niin mitä keskuspankki tekee? Ilmoittaa, ettei kevyempää rahapolitiikkaa juuri nyt tarvitakaan? Juuri näin, jos on Tšekin keskuspankin puheenjohtaja Singeriä uskominen.
The Latvian State Treasury is implementing a primary dealer system in order to develop the government debt market and increase market activity.
The Czech central bank kept its repo rate unchanged at 0.05%, as expected. However, the central bank chief noted that the need for monetary policy easing is less urgent now than before (because of the recent CZK weakening), while keeping the door open for FX interventions later during the year.
The Hungarian central bank cut its key rate by 25bp to 5.50%. We are pencilling in one more rate cut over the near term, but the weakness of the HUF and the still elevated inflation rate will remain decisive factors for further monetary easing.