News
CZ: Negative – TOP 09, one of the government’s junior coalition parties, threatens to quit the government if the cabinet fails to join the EU fiscal compact (p2)
RO: Positive – MinFin sold RON 917mn 3Y GBs: avg. yield at 6.95%, bid/cover 2.17 (p2)
Today’s Events
BG: Dec CPI, Dec unemployment / CZ: Nov C/A / HU: Dec CPI, Nov IP (final) / PL: Dec CPI, Dec money supply, Nov C/A / RO: Nov C/A / RU: Dec International reserves, Nov trade balance / SK: Dec CPI / SL: Nov IP / UA: Nov trade balance
EEMEA Markets
Inflation releases in focus: Today both Hungary and Poland are publishing their December inflation numbers. The Hungarian CPI came in at 4.1% yoy following 4.3% yoy in November. Looking ahead, the Hungarian headline inflation will likely move well above 5% yoy on the back of VAT increase to 27% from 25%. We however do not think that this would be the reason for central bank to turn the hawkish. We see the NBH almost entirely focused on the risk premium of the country and the IMF/ EU talks and agreements. We would expect that the bank would reverse the recent rate hikes fairly quickly. In case of Poland we expect inflation to increase close to 4.5%yoy from 4.3%yoy on the back negative basis effects.
EPFR flow data show outflow for the week from 04-Jan-12 to 11-Jan-12: EM bonds funds show redemptions of USD 740mn, mostly driven by Hard currency funds with outflow of USD 557mn. Seemingly, the hard currency funds now come under pressure, as up to now they have been holding up pretty well even in the recent markets downturn, especially compared to Local currency funds, which were recording steady redemptions. However, this week number effectively offsets the Hard currency inflows of Dec and brings total flow for this group only to USD 0.2bn, as the Local funds stay deep in red with over USD 1.1bn total outflow for the same period.
Click here to read the full report:
http://www.easyforexnews.net/wp-content/uploads/2012/01/eed_fi_130112_0000.pdf
Gyula Toth
UniCredit Research