CEE Weekly Bond Markets Outlook

Inside:

In Poland RZB recognised big movements in politics ahead of the second reading of the budget in parliament. The PO made again a coalition offer to the governing PiS, but there were also talks between the governing PiS and the smaller nationalist parties Self defence and PSL concerning a coalition. The risks for the Polish markets have risen, but RZB still recommend to buy.
In Hungary the local FI and FX markets are tracking global and regional developments. In RZB\'s view, they will continue to lack any clear trend in the upcoming weeks. Only the inflation release (Tuesday, 17 Jan) might have some significance in the next week, although it will most probably be unable to stir market sentiment.
The Czech crown managed to establish a new all-time strong level on Wednesday below 28.70 against the EUR on the back of favorable external factors before a correction of the PLN and a higher than expected C/A deficit for November pushed the CZK back to the 28.80 level.
The Slovak crown also reached new all-time strong levels in the course of the week, breaking through the crucial 37.50 threshold against the EUR and temporarily touching 37.305 on Tuesday before correcting back just above 37.50 as the PLN ran out of steam.