Central Banks in Focus: What to Expect This Week
Czech Republic and Poland: PPI Growth and Core Inflation
- Recent data shows PPI growth in the Czech Republic and steady elevated core inflation in Poland.
National Bank of Hungary Meeting
- No change in rates at 6.50% is expected despite inflation and GDP surprising to the downside.
- EUR/HUF moved up on Friday, indicating a persistent risk-off mood.
Central Bank Meeting in Turkey
- Rates are expected to remain unchanged at 50%.
- Focus will be on communication given higher-than-expected inflation numbers and a dovish tone in the latest inflation report.
Current Trends and Market Outlook
- CEE FX is still seeking new levels post-election, with a generally bearish outlook.
- Lower EUR/USD, downside economic surprises, and expectations of rate cuts may continue to pressure FX markets.
- Friday’s equity market sell-off could bring back risk-off sentiment.
EUR/HUF Focus and Market Analysis
- EUR/HUF will remain the main focus this week, hovering above 408.
- Market has outpriced earlier rate hike expectations, with potential for a rally in HUF rates.
- Positioning in HUF remains short, suggesting the NBH may have the worst behind it.
Overall, this week’s focus is on central bank meetings in the region, with attention on inflation numbers, rate decisions, and market sentiment. Stay tuned for updates on how these events may impact currency markets and investor strategies.