CEE Weekly Bond Market Outlook

5 Iulie 2010

RAIFFEISEN BANK S.A.

 

Highlights

Poland – Despite the more hawkish wording by the MPC on Wednesday, we do not expect any rate increases this year.The comments were not as clear as we would expect, if rate increases were near. Most likely, the October inflation report will be more important concerning any signs and size of possible rate hikes. Our short-term LCY bond recommendation remains "neutral".

Hungary – Clarification on the bank tax was postponed by the government as banks were given a reprieve to digest the numbers. Both domestic and international statements made it clear that the burden of the levy is too heavy, but nevertheless Mr. Orban is sticking to the HUF 200 bn. Details will probably arrive at the weekend. Some interesting macro news is expected in the coming days. The budget is expected to come in close to the full-year target.

Czech Republic – President Klaus appointed Kamil Janacek as a new central bank board member to fill the gap after the resignation of CNB governor Tuma. It is worth noting that Janacek is a close friend of the president. That means that the new CNB board is a bit more euro-sceptical now and is likely to strongly oppose EU regulation of the financial system.From the point of view of monetary policy, Janacek is likely to be more of a dove rather than a hawk.

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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...