CEE Weekly Bond Markets Outlook

Inside this issue:

In Poland we would close long-positions on Polish T-bonds and the zloty, because of the EU referendum in France. A sell off after a \"No-vote\" would be a buying opportunity in our view.

In Hungary the Monetary Council decided to cut rates by another 25bp. The Finance Minister meanwhile is playing down the problems concerning the fiscal situation as the politics are gearing up for the pre-election campaigns. Analysts on the other side are more skeptical about the fiscal outlook.

The Czech National Bank (CNB) left its key interest rate unchanged as expected. The adoption of the neutral policy stance by the CNB Board has not affected local bond market much. The market is still not 100% sure whether interest rates will go up in foreseeable future, thus we keep our \"hold\" recommendation on CZGB\'s.

The National Bank of Slovakia left the interest rates unchanged in line with our expectations. The concerns of the monetary policy council over the excessively high real wage growth do support our expectations that the easing cycle is over.