Czech and Polish PMIs have decoupled in April
Quiet regional markets eye the US payrolls report
The Labour Day holiday cooled market activity in Central Europe despite ongoing tensions in eastern Ukraine and a closely watched recent military offensive of the pro-Russian separatists.
We think that markets remain calm for most of the day as many participants have extended their holidays until the weekend. Both regional currencies and government bonds will probably shrug-off fresh PMIs from manufacturing, no matter how interesting they are. Czech and Polish PMIs decoupled significantly in April as the former moved higher (to 56.5), while the latter declined (to 52.0). Our only explanation for such divergence is nervousness of some Polish businesses caused by the conflict in neighbouring Ukraine. After all, Russia’s share in Polish exports exceeds 5 %.
Read the full report: FX Daily
KBC