Data mix due this week

The calendar of macroeconomic releases is quite full. Central bank meetings are planned in Romania and Serbia. In both countries, we expect stability of rates. March inflation figures will be released in Hungary, Romania and Serbia. As far as price development is concerned, producer prices are due in Serbia and Croatia. We will get a series of data on retail and industry sector performances in several CEE countries in February. On Monday, retail sales growth will be published in Romania, Hungary and Slovakia, as well as industrial output growth in Czechia. Industry is due Thursday in Slovakia and Slovenia. Apart from that, we will get to see trade data in Romania, Slovakia and Poland, as well as the current account balance in Romania and Poland. Finally, on Friday after the market closes, S&P is scheduled to review the rating and outlook for Romania; we expect the status quo to be maintained.

President Trump’s announcement makes us revise our forecasts for CEE that we plan to publish by mid of the week. Stay tuned.

FX market developments

CEE currencies have been hit hard with President Trump's announcement on global tariffs. The EU will face 20% tariffs on all exports to the US on top of what was announced earlier, for example 25% tariffs on cars. The Czech koruna and Hungarian forint weakened roughly 1% against the euro throughout the week, while the EURPLN moved to 4.26 (2% depreciation vs. the euro), the highest since mid-January. The Polish zloty could also have been impacted by the sudden change of Governor Glapinski's tone to dovish. He said that monetary easing is getting close and he envisaged more than 100-basis point cuts this year. Global factors are driving local markets to a great extent, and we do not expect this to change anytime soon. The local central bank meetings in Romania and Serbia should end with the expected outcome of rate stability.

Bond market developments

Government bonds, including those in CEE, benefited from the sell-off on global equity markets triggered by the announcement of draconian tariffs by US President Trump, which may dampen the global economic outlook. While 10-year yields in Czechia and Hungary declined slightly more than in Germany (-30bp vs. -20bp w/w), Polish 10-year bonds rallied twice as much (almost -60bp w/w). The reason behind this is the very dovish stance of Governor Glapinski, who outlined positive prospects for rate cuts to take place as early as this year (up to -100bp). This week, Romania will reopen ROMGBs 2028, 2030 and 2034. Czechia, Hungary, and Slovenia will sell T-bills, while Czechia and Poland will offer various T-bond.

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