News
RO: Positive – MinFin sold RON 436mn 5Y T-Bonds: avg. yield 7%, bid/cover 3.2 (p2)
PL: Hawkish – Dec IP rose by 7.7% yoy / Dec PPI came in at 8.1% yoy (p2)
Today’s Events
HU: Nov gross wages / PL: Core inflation / RU: Dec PPI / SK: Dec unemployment
EEMEA Markets
Poland – the first Dec industrial production data bode well for the region: the Polish December industrial production data once again surprised on the upside and came at 7.7% yoy vs. 6.2% yoy consensus, in seasonally adjusted mom terms the IndOut was up by 0.9% (10.5% annualized) after a very strong 1.6% mom reading in November. Industrial production in 4Q at 3.2% qoq was the strongest since 1Q10 and in our view bodes particularly well for the rest of the region. Strong growth coupled with a relatively elevated level of inflation fits well with the recent more hawkish MPC comments which should also provide some further support for the PLN. We remain short PLN/CZK with a target at 5.90.
Hungary – another meeting is scheduled for today: European Commissioner for Economic and Financial Affairs, Olli Rehn, is scheduled to meet Hungarian, Tamás Fellegi, and the later is expected to hold a press conference at 11.00 CET. At the meeting Mr. Rehn will likely outline in more detail the preconditions for any official talks to start about external assistance. The Hungarian parliament will have its first sitting on 13 February and, without an extraordinary meeting, this will be the first opportunity to change the disputed laws. We think the market is still short HUF and hence further short squeeze will likely occur if the newsflow remains ok. The best way to play it is via put options on EUR/HUF which benefit from the elevated risk reversal spreads. We remain long 3M EUR/HUF put options with a 285 strike.
Click here to read the full report: EEMEA Eco Daily 200112
Gyula Toth
UniCredit Research