Czech and Hungarian retail sales surprised on upside
NBP likely to cut rates by 25 bps
The Czech currency was hit by worse than expected revised GDP data yesterday and weakened by 0.6%. The Polish zloty, on the contrary, strengthened while the Hungarian forint hovered around its Monday closing levels. Today, the regional macroeconomical calendar is full of interesting events. Czech and Hungarian retail sales, published in the morning, show rising domestic demand in both countries. Annual retail sales growth of 1.5 % in the Czech Republic in April was far above the market consensus and signals better growth prospects after a fall in the first quarter of this year. Hungarian annual retail sales growth of 3.4 % surprised on the upside, too. Although the base effect contributed significantly to the higher-than-expected increase in this case, we believe that strengthening of the domestic demand may continue, owing to real wage and pension rise as well as decline of FX loans repayments.
Read the full report: FX Daily
KBC