CPI figures for April surprised the market on the upside.
Following the good start of the year, EM currencies did not hold on to the gains. Yet the orderly gradual EM FX decline has not produced much volatility creating the impression of a bomb waiting to explode if only another “black swan” event strikes.
Economic activity indicators have shown that the Polish economy is finally losing momentum, but the slowdown this year will not be dramatic.
Risk is mispriced, again. And hence caution is still essential. But unless some of the key risks actually materialise, we are most likely to see Emerging currencies drift stronger over the coming months.
We are turning more optimistic on the Polish economy. The resilience so far has been surprising and now the risks coming from abroad seem to be reduced. Stronger PLN and rate cuts in the second half of the year.
Putin is under pressure to secure progress for the middle class going forward and to reform. Political stability for the coming presidential term is by no means given!
The Czech economy has been seen as the safe haven or the Switzerland of Central and Eastern Europe. However it is very vulnerable to new risks!
Many interesting and globally important stories in easily digestable format.
VIDEO – Hungary has been one of the top stories in the Emerging Market universe in the past few months. With the country downgraded to “junk” now by all agencies IMF help is being negotiated.
Black clouds on the western horizon.
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