News
BG: Neutral – May CPI readings come in flat mom (p2)
CZ: Neutral – April C/A posts CZK 6.7bn deficit (p2)
KZ: Positive – May constant price Retail trade turnover accelerates to 11.3% yoy (p2)
PL: Mixed – May M3 money supply grows to PLN 795bn (+0.8% mom; + 7.8% yoy); loans show mixed dynamics (p2)
RO: Positive – April C/A deficit narrows by 46.4% yoy / Neutral – April medium- and long-term external debt in 4.6% yoy (p3)
Today’s Events
BG: April C/A / CZ: May PPI / CR: May CPI/ HU: April IP (Final); GB buy-back auction / PL: Budget YTD as of May; PLN 2.5bn 2023 POLGB / RU: RUB 10bn 2021 and RUB 20bn 2017 OFZ auction; CPI YTD as of June, 13 / SL: April Wages / TK: March Unemployment / UA: May IP; May Retail trade
EEMEA Markets
Tuesday saw the release of balance of payments data for April for Czech, Lithuania, Poland and Romania. There are some trends of note. Firstly C/A deficit widening in Lithuania and Poland contrasts with a contraction in Romania. Over the first 4 months of the year Poland’s deficit stood at EUR4.5bn, compared with a deficit of EUR1.5bn for the same period last year. At the end of last year Poland’s C/A deficit stood at 3.4% of GDP. From a surplus of EUR45mn for the first four months of last year, Lithuania posted a deficit of EUR306mn for the same period this year. Lithuania’s C/A deficit finished 2010 at a surplus of 1.8% of GDP but for the full year this year the C/A is likely to slip back into deficit, in line with a recovery in domestic demand. This follows a similar pattern in Turkey’s C/A deficit, released earlier this week. At EUR21.2bn for the first 4 months of this year, the C/A deficit in Turkey was over double what it was for the same period last year. At the end of last year, Turkey’s C/A deficit stood at 6.6% of GDP. The key contrast at this stage is Romania which has seen its C/A contract this year while in Czech the C/A deficit YTD is broadly unchanged. YTD Romania’s deficit stood at EUR1.2bn, compared with EUR2.1bn for the same period last year. At the end of last year Romania’s C/A deficit stood at 4.2% of GDP.
A couple of countries show some positive FDI trends. For example a strong April means that Poland saw sufficient FDI over the course of the first 4 months of the year to cover 86% of the C/A deficit, though re-statement of the errors and omissions term at the end of the month is set to widen the C/A deficit and in turn reduce this ratio. From that perspective Turkey is in a more vulnerable position with FDI covering only 12% of the C/A deficit YTD. In Lithuania FDI covered 36% of the C/A deficit. Czech is best positioned with FDI covering 121% of the C/A deficit.
Click here to read the full report:
http://www.easyforexnews.net/wp-content/uploads/2011/06/eed_fi_150611_0000.pdf
Gillian Edgeworth
UniCredit Research