CEE Weekly Bond Markets Outlook

Inside the CEE Weekly Bond Market issue:

In Poland the most likely scenario is a coalition between the PiS and the PO. We think that the sell off on the Polish bond market after the elections is a buying opportunity. The Polish finance ministry issued a USD-bond and said that it will exchange some parts of that into zloty. We recommend to sell PLN/EUR (sell euro /buy zloty).


In Hungarythe week brought a whole basket of bad news concerning the budget deficit as well as the EMU entry date. While the budget deficit is likely to come in above 6% of GDP in 2005 instead of the planned 3.6%, the 2010 EMU entry date may have to be postponed.


Korean car maker Hyundai unveiled plans for a EUR 1 bn investment in the Czech Republic. An official confirmation of the third big FDI into the Czech car industry, which is expected in early October, could easily provoke testing of the stronger side of the CZK/EUR 29.30 threshold.


While the positive economic outlook should provide a room for an appreciation of the Slovak crown, the economic fundamentals are currently overshadowed by the tensions on both the domestic political scene and the muted sentiment within the region.

RZB Research