CEE Weekly-Bond Markets Outlook

28 August 2009

RAIFFEISEN BANK S.A.

Recommendations (1-month horizon)

Neutral PLN bonds; Neutral HUF bonds; Neutral CZK bonds

 

Highlights

� Poland - With the surprisingly strong GDP figures for Q2 we put our GDP forecast for the whole year under revision. At the short-end of the yield curve the potential for further yield decreases might be limited as it becomes more and more evident that no more rate cuts are necessary to support the economy.

� Hungary - The Monetary Council of Magyar Nemzeti Bank cut the key interest rate for the second time in a row at its meeting on Monday, this time by "only" 50bp. According to András Simor, the governor of the central bank, the Council also discussed a 75bp cut this time. The key rate now stands at 8%.

� Czech Republic - Next week the calendar for domestic economic data releases is almost empty again. Thus, the global market development will likely remain the key driver for the Czech market. With the fiscal risks stemming from the upcoming parliamentary election and given the current level of bond yields, we maintain our neutral position for Czech government bonds for the time being.

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The tricky lag LUCIAN CROITORU Adviser to the Governor - BANCA NAŢIONALĂ A ROMÂNIEI Lucian Croitoru, Adviser on monetary policy issues to the National Bank of Romania Governor, talks about the NBR’s next moves and explains why the decrease ofthe policy rate hasn’t been reflected into lower interest rates on bank loans. mai mult... The turnaround CRISTIAN SPORIS Secretar de Stat - MINISTERUL ECONOMIEI ŞI FINANŢELOR Cristian Sporis, Secretary of State at the Ministry of Public Finance, in charge with the national treasury and public debt, explains how the state managed to borrow money at the lowest costs in the last seven years and how it turned from a clear market taker into a player with a strong position on the market. mai mult...