The calendar in the CEE region gets a bit busier again with the start of a new month, but market liquidity is expected to decrease as the end of the year approaches. PMIs for the region are due to be released today, and while they confirm only a slight improvement in the industrial situation, the overall situation remains negative.
Türkiye's inflation statistics for November will be released tomorrow. The rate fell further from 48.6% a year to 46.6% and from 1.9% month on month, slightly below market expectations, with Turkey's central bank expected to confirm its intention to cut interest rates at its December meeting.
The National Bank of Poland is expected to decide to keep interest rates unchanged on Wednesday, and as usual, the focus will be on the next day's press conference.
On Thursday, retail sales will be announced in Hungary, and on Friday, industrial sales will be announced in Hungary and retail sales in the Czech Republic.
Looking beyond the calendar, we will be keeping an eye on Romania's political trends following Sunday's general election and the recount of last weekend's presidential election. In the Czech Republic, the president of the Czech National Bank is scheduled to speak at a local conference on Wednesday, which could provide hints about the December meeting.
CEE FX continues to diverge with a weak HUF record, while on the other side PLN and CZK are rising. Considering the underperformance of the CZK rate last week, EUR/CZK could continue to fall further, with a test of 25.200 on the table, especially with the Governor's speech scheduled, which usually leads to a hawkish reprice. We expect it to be possible.
Although we think PLN has risen too much, highly dovish NBP pricing provides an opportunity for some correction after the central bank's press conference this week, which again supports the currency. There is a possibility. The euro/forint is still near a two-year high, but the appointment of a new president of the Hungarian National Bank could provide some relief to the market. Meanwhile, today's trading could be bearish for HUF assets as Moody's changed its rating outlook from stable to negative on Friday.
František Taborski
