Tag: Central and Eastern Europe
May
Poland: Rate cut hopes rise as GDP growth slows down to 4-year low
Poland’s GDP figures for Q1 came in on the weak side of expectations. What does it imply for the PLN and next actions of the Polish central bank?
Poland: Central bank tries to revive the spluttering economy
The Polish central bank cut interest rates by 25 bps today, with the key policy rate now at fresh record low of 3%. The move was in line with our latest prediction, but against market consensus pointing to no policy change. What next?
Poland: ECB action pushing the Polish central bank back to easing
Against the background of light calendar of market-sensitive events on the global markets, the key focus of attention in the Polish market will be on the MPC meeting with decision announcement due on Wednesday. We have changed our view and now we expect the Polish central bank to resume interest rate cuts.
April
Poland: No recession again
Output figures for March confirm that the worst for the Polish economy is over and it has escaped recession again. The data are not a factor, which could help to build majority in the MPC for another rate cut already at the next meeting in early May. However, given uncertainty regarding the economic recovery later this year, one cannot exclude some fine-tuning policy easing in June-July.
Poland: MPC does not want to resort to unconventional policy
The Polish MPC kept rates on hold at record low level. Wording of the post-meeting statement and comments at the press conference was not as dovish as some market participants expected, which provided a lift for the PLN.
Poland: MPC preview – wait and see
Along with the larger than expected 50bps rate cut last month, the Polish MPC has shifted into wait-and-mode. Domestic data released over the past month were mostly on the soft side. Does it mean that monetary policy easing in Poland will be continued?
March
Poland: On the fast track to euro adoption?
Poland’s Prime Minister Donald Tusk took a big political gamble yesterday, opening the door to a referendum on euro adoption amid record strong public opposition to the single currency. Does it mean that we are going to see a major expansion of the Euro area soon (Poland would become the 6th largest economy in the single currency bloc)?
Poland: Output growth back in the negative territory
Output figures for February came in broadly in line with expectations. The numbers confirm the ongoing economic slowdown, but at the same time suggest the worst is over for the Polish economy and with tailwind provided by a rebound in Germany the EU’s largest Eastern economy is likely to see a shy recovery within a few months. How do the figures affect monetary policy outlook and the PLN?
Poland: Inflation below the target range
Poland's CPI inflation for February came in lower than expected. Does it mean the Polish central bank will continue monetary policy easing, even despite it has adopted the "wait-and-see" mode recently? Stronger than expected data on exports has muted negative impact on PLN coming from lower than expected inflation.
Poland: Policy rate at record low
The Polish MPC surprised the market, delivering 50 bps rate cut at its meeting in March while a modest move by 25 bps or no cut had been expected. Does it herald start of more aggressive monetary easing in Poland and thus PLN weakness?
Poland: Nearing the bottom
GDP growth in Q4 slowed, but less than expected. Together with the recent high frequency domestic data and promising activity indicators from Germany (Poland's key export market) this supports our view that the Polish economy is nearing the bottom while monetary policy easing is coming to an end. PLN positive.
February
Poland: A positive surprise eventually
Industrial output figures for January have beaten the most optimistic forecasts, which together with stronger-than-expected German ZEW index released earlier today, heralds better times for the Polish economy going forward. PLN gained on the data and swap curve moved up. Will the Polish central bank continue monetary policy easing?
Poland: Sharp inflation drop heralds next rate cut
Deeper than expected inflation drop in January adds to pressure on conservative majority at the Polish rate-setting panel to continue policy easing, despite a nearing pause in rate cuts suggested by them earlier this year.
Czech central bank plays down FX intervention risk in the near-term
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.
Poland: Central bank chases reality
Polish central bank cut rates for the fourth month in a row in an attempt to reinvigorate the ailing economy. The decision was fully in line with expectations, but message in the post-meeting statement and during press conference was more hawkish than expected (again), strengthening the PLN and driving market rates higher. What's next for Poland's monetary policy?
Poland: MPC preview – fourth cut in a row and what next?
We expect that the Polish central bank will continue policy easing with 25 bps rate cut tomorrow. The key focus of attention will be on the post-meeting statement and comments at the press conference in search for hints at future policy actions. How far will Polish rate-setters go with rate reductions? Can monetary policy prospects in Poland be affected by a possible reshuffle of the MPC?
January
Poland: GDP figures not as weak as feared
Slowdown of the Polish economy in the final quarter of last year proved somewhat less pronounced than feared. Moreover, breakdown of the GDP growth is supportive to our relatively constructive view on the Polish economy for 2013. We read the data as neutral for monetary policy expectations and not good enough to remove short-term pressure on the PLN weakening.
Poland: Inflation below the target
The headline inflation rate in December dropped below the target for the first time since August 2010, somewhat reviving expectations for further monetary easing in Poland and supporting our view for two next rate cuts in February and March.
Poland: MPC less dovish than expected again
The Polish MPC cut interest rates for the third time in a row today by 25 bps. As some market participants expected a bolder move by 50 bps and given less dovish message at the post-meeting press conference, PLN gained and market rates went up considerably.
Poland: MPC preview – bolder policy action this time?
Government’s officials keep pushing on the Polish MPC to quicken rate cuts and help the slowing economy. Will Polish central bankers deliver 50 bps cut next week?
November
Poland: Economic growth the slowest in over 3 years
GDP growth in Poland slowed down more than expected in Q3. We think this will encourage Polish central bankers to deliver more rate cuts than they have suggested so far, but it should not put much negative pressure on the PLN.
Poland: Political storm or oasis of political stability?
Over the past few years, Poland has been perceived as an oasis of political stability with one of very few governments in Europe, which survived elections during the crisis. However, over the last weekend the junior coalition party (PSL) surprisingly changed its leader. Does it mean that the country faces a political storm?
Poland: Inflation back in the target range
CPI inflation returned to the target range for the first time since December 2010, supporting our view that next interest rate cut of 25bps in possible already next month.
Poland: Better late than never
The Polish MPC reduced interest rates by 25bps. Given reluctance of Polish central bankers to respond earlier to threats to economic growth, one could say better late than never. We think the monetary easing in Poland will be continued with two more steps by 25bps in December and January. However, given the recent news improving inflation outlook, we see increasing probability that reduction in rates will be larger.
October
Poland: First output drop since late 2009
Industrial output growth in September dropped for the first time since late 2009, confirming clear slowdown of the Polish economy. Will the MPC keep waiting with the first interest rate cut and the PLN remain in the appreciation trend?
Poland: More reasons for rate cuts
CPI inflation in September proved lower than expected, strengthening expectations for start of monetary easing in Poland. The PLN found some support in better than expected balance of payments data, which offset negative impact of low CPI reading.
Poland: “We won’t let the crisis through our gates”
Polish Prime Minister Donald Tusk gave a long-awaited policy speech today, outlining how the country is going to keep economic growth and fiscal discipline at the same time.
EM FX Monocle – A bird in hand…
With more easing unleashed by major central banks in September the EM FX has come into spotlight again as investors rush for carry in low volatility environment. Remain long EM FX, but mind the low perception of risk prevailing in the markets and hedge the sensitive EM exposures while cheap – better be safe than sorry.
September
Poland: Output growth slows sharply
Industrial output growth slowed down stronger than expected in August, strengthening expectations for an interest rate cut and negatively affecting the PLN.
Poland: Inflation softens a bit
CPI figures for August showed that inflation softened a bit, but this is not enough to trigger the first interest rate cut already in October.
Poland: Rate cut just around the corner
The Polish MPC kept interest rates on hold, but wording of the post-meeting statement and comments at the press conference signal that the first rate cut is just around the corner.
August
Poland: Bitterly disappointing GDP figures
GDP growth in Q2 slowed down much stronger than expected, adding to depreciation pressure on the PLN and strengthening expectations for interest rate cuts.
EM FX Monocle – Test time
"Into summer lull" turned out again to be the right call in the June EM FX Monocle – no major moves over summer, but FX volatilities lower and EM FX gained vs the USD as risk perception improved.
Poland: Slowdown under control
Industrial output growth rebounded in July, but the downward trend remains intact and other domestic data confirm expectations for slowdown of the Polish economy. How can it affect the PLN and Polish rates?
July
Poland: Increasingly fast way down
Following GDP figures for Q1 released in late May, we have written that the Polish economy has started a long way down. Output figures for June revealed today indicate that it is becoming an increasingly fast way down.
Poland: Inflation high, despite little impact of Euro 2012
CPI inflation surprised on the upside in June, even despite little evidence of price effects of Euro 2012. This provides some support for hawkish camp at the Polish MPC.
Poland: Much too early for a rate cut
Wording of Polish central bankers has become less hawkish, as they are increasingly worried about economic growth prospects. When will the first rate cut be possible?
June
CEE valutaer – Sommerstilheden er ved at indfinde sig
Emerging Markets-valutaer: Sommerstilheden er ved at indfinde sig ”Life after the storm” var en god overskrift på vores maj-udgaven – faktisk er volatiliteten i EM-valutaerne faldet, og valutaerne begyndte at rette sig i juni. De europæiske problemer er endnu ikke …
EM FX Monocle – Into the summer lull
"Life after the storm" was a good title for our May EM FX Monocle – indeed, EM FX volatilities have declined and the currencies started to recover in June.
Poland: More arguments against next hikes
Sluggish output growth coupled with clear drop in inflation (both CPI and core) strengthens dovish faction at the Polish MPC.
Poland: Still in the game
Even though Poland cannot entirely escape the fallout from the Euro area crisis, it can hold its own better than most of its peers. However, this does not help the PLN, which remains at the mercy of global factors.
Poland: Lower probability of next rate hike
The Polish MPC kept rates on hold and wording of Polish rate-setters indicates the most likely scenario is no change in monetary policy parameters until the year-end.
Poland: MPC will wait and see as Poles watch Euro 2012
On Wednesday, the Polish central bank will announce its decision on rates, just two days before the opening game of the Euro 2012 in Warsaw. Could the MPC surprise again as it did last month by raising borrowing costs?
Poland: Resilient does not mean isolated
Drop in Poland’s PMI for May was weaker than expected, which confirms the Polish economy remains quite resilient to negative external developments. However, resilient does not mean isolated.
May
Poland: Start of the long way down
Following surprising acceleration in the final quarter of last year, Poland’s economic growth has finally slowed down in early 2012, and there is more slowdown ahead.
Emerging Markets FX Monocle – Life after the storm
The storm did come after the calm, as our April issue of the Monocle suggested. It may get worse before it gets better in the coming weeks, but not for long.
Poland: Weak output growth
Output growth in April slightly accelerated, but this is largely due to statistical factors.
Poland: Inflation stubbornly high
CPI figures for April surprised the market on the upside.
April
Emerging Markets FX Monocle – Calm before the storm?
Following the good start of the year, EM currencies did not hold on to the gains. Yet the orderly gradual EM FX decline has not produced much volatility creating the impression of a bomb waiting to explode if only another “black swan” event strikes.
Poland: Losing momentum
Economic activity indicators have shown that the Polish economy is finally losing momentum, but the slowdown this year will not be dramatic.
March
Emerging Markets FX Monocle – a lot of news, little action
Risk is mispriced, again. And hence caution is still essential. But unless some of the key risks actually materialise, we are most likely to see Emerging currencies drift stronger over the coming months.
Updated forecasts for Poland
We are turning more optimistic on the Polish economy. The resilience so far has been surprising and now the risks coming from abroad seem to be reduced. Stronger PLN and rate cuts in the second half of the year.
February
Sunday’s elections of Mr Putin
Putin is under pressure to secure progress for the middle class going forward and to reform. Political stability for the coming presidential term is by no means given!
Czech Republic – Resilient to old risks, vulnerable to new
The Czech economy has been seen as the safe haven or the Switzerland of Central and Eastern Europe. However it is very vulnerable to new risks!
January
Emerging Markets Outlook 2012
Many interesting and globally important stories in easily digestable format.
Hungary – The good, the bad and the ugly
VIDEO - Hungary has been one of the top stories in the Emerging Market universe in the past few months. With the country downgraded to “junk” now by all agencies IMF help is being negotiated.
December
New Latvia Outlook
Black clouds on the western horizon.
Lithuania Outlook
Times of great belt-tightening.
Russia Update
Exports will bite into growth next year, but consumers are still spending.
Poland Outlook
Poland will be a growth outperformer in EU again in 2012.
Estonia Outlook
Broad-based cooling in Europe causes an inevitable slowdown of Estonian growth.
Emerging Markets: Elections Calendar 2012
Presidential election of Putin - Xi Jinping new top China official - Taiwan Strait tensions could increase - New presidents in Mexico and Korea? - The end of Chavez? - One step at a time in Egypt
November
Western banks – the big elephant in CEE
With the western banking system in trouble with liquidity and capital sufficiency, Central and Eastern Europe are also facing risks of tighter liquidity and longer-term capital withdrawal.
Balkans – victims of Greek and Italian crisis?
A situation report by Nordea's Balkan expert, Elisabeth Andreew, following a recent trip to Bulgaria, Serbia and Croatia.
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@simonhinrichsen Absolutely. Will be my pleasure!
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@finansakrobat It reminds about cross-country skiing, but where Sweden actually wins in the end. For a change.
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@finansakrobat @RobinWigg yea, but, eh, but, but eh, but we’re in the Hockey Final tomorrow!
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Sweden got 372 points last year. Denmark 281 this year. Just saying. Congrats Denmark! #eurovision
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@simonhinrichsen Congrats. Owe you a beer!
