CEE Macroeconomic and Fixed Income Research

Analysts’ view

Looking Ahead in CEE This Week: This week will be much less dense in terms of macro releases in the CEE region than the previous one. After the SNB’s move, further FX market volatility cannot be ruled out, as market participants will digest the surprising move further. As for CEE countries, the recent FX conversion scheme shields CHF debt holders in Hungary from the increase of the CHFHUF rate. In Poland, the drop of the oil price and decrease of the CHF Libor target range help FX debtors as well. The only important event scheduled for this week is the rate decision in Turkey on Tuesday. As the CBT still seems to be implementing liquidity management the rate cut may be delayed to February. Nonetheless, until the end of this quarter, we envisage an overall 50 bp reduction in Turkey’s key rate to 7.75%.
HU Bonds: Bullish sentiment pushed Hungarian bond yields to new historical lows with the 10-year tenor hitting 3.21% on Friday afternoon. The longerdated 15-year benchmark benefited most with the yield falling 16 bps to 3.46%.
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