The nineteenth week of the third year of the war saw the IMF disburse an additional USD 2.2 billion, with positive prospects for further scheduled disbursements. Business sentiment worsened in June due to concerns about electricity supply. In May, the balance of payments showed a double deficit due to the lack of external aid. |
The (geo-)political turbulence of recent weeks has eased somewhat and macroeconomic data has regained prominence. Monetary policy and interest rate expectations remain key factors for the currency markets. For EUR/USD, this means a slightly higher notation, and the rollercoaster ride of EUR/CHF is currently heading upwards. The fact that the central banks' interest rate policy can rapidly affect the markets was once again demonstrated by the example of the Czech koruna. On the other hand, the Hungarian forint has already entered a relaxed summer mood. With this issue, things will also be quieter concerning the FX Watch as well. Until 28 August, we will only be issuing this publication on a monthly basis. This issues features
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The eighteenth week of the third year of the war brought a positive GDP dynamic over Q1'24, thus exceeding all market forecasts. Analyzing the minutes of the latest NBU monetary committee allowed us to improve our year-end forecast of policy rates in 2024. Consumer sentiment worsened, while banks improved their profitability in May in mom terms. |
The seventeenth week of the third year of the war brought some stability in FX market sentiment. The government seems to be reducing its activity in lowering bond yields. Bank liquidity gradually declined due to active NBU interventions, but the liquidity volume remains more than sufficient for the banking system for the time being. |
We were already focused on the uncertainties that the US election could trigger on financial markets. But we did not have to look that far, as the European elections and the resulting snap elections in France increased the risks for the euro, in line with the motto: “We have euro risks at home”. This development boosted safe havens such as the US dollar and the Swiss franc, helping them to strengthen against the euro. Riskier assets, such as the Polish złoty, lost ground. On the other hand, the rouble is struggling with different issues: US sanctions are sending the Russian currency down a path of uncertainty. Meanwhile, we can observe a strong Albanian lek and Serbian dinar in SEE. This issues features
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