CEE Equities Advance on NBP Inflation Outlook

Market Snapshot

Asset	Level	Change
BIST 100	14,321.20	+1.53%
iShares Poland	40.37	+2.00%
EUR/PLN	4.33	+0.11%
EUR/HUF	356.83	+0.16%
EUR/CZK	24.26	+0.11%
USD/TRY	46.99	+0.09%
Brent Crude	79.25	+4.26%
Gold	4,065.50	-0.94%
Bitcoin	62,845.67	-1.50%
Poland 10Y Govt Yield	5.74%	+2.87%
Hungary 10Y Govt Yield	5.65%	-9.89%

Prior Economic Events

Data	Prior	Cons	Actual
No events available

Today's Economic Events

Data	Prior	Cons	Time
No events available

Polish and Hungarian equities rose sharply while regional currencies eased modestly against the euro amid thin volumes.
NBP inflation projections signal gradual normalization through 2028 while CNB flagged ongoing caution on price pressures.
Hungary FX reserves hit record highs and BIST 100 climbed as lira stabilized; calendar remains empty through mid-week.

Yesterday's Recap

Regional markets posted gains Friday with BIST 100 advancing 1.53 percent to 14,321.20 and iShares Poland rising 2.00 percent to 40.37. EUR/PLN edged 0.11 percent higher to 4.33 while EUR/HUF and EUR/CZK each gained 0.11-0.16 percent. Poland 10Y yields climbed 2.87 percent to 5.74 percent whereas Hungary 10Y yields fell 9.89 percent to 5.65 percent.

NBP projections placed CPI at 2.9 percent in 2026, 2.7 percent in 2027 and 2.2 percent in 2028, supporting views of contained price growth. CNB highlighted that headline inflation may return to or slightly above its 2 percent target, warranting continued policy caution. Hungary reported record FX reserves of 61.1 billion euros in May, underscoring improved external buffers.

Brent crude rose 4.26 percent to 79.25 dollars per barrel while gold slipped 0.94 percent. First power from the Baltic Power offshore wind farm began flowing, highlighting expanding Polish-Canadian energy cooperation. ETF inflows continued across Europe, with NBP among central banks adding exposure.

The Day Ahead

No macroeconomic releases are scheduled across Poland, Czech Republic, Hungary, Romania or Turkey through Wednesday. Markets will likely focus on any central bank commentary or global risk sentiment. Poland’s stronger Q1 GDP print and NBP’s benign inflation path may keep zloty under watch if ECB signals shift.

Hungary’s elevated reserves could support forint stability absent new data. Turkey’s high inflation backdrop remains a standing concern even without fresh prints. Equity flows may stay light until clearer global cues emerge later in the week.

IOC’s temporary easing toward Russia drew Polish criticism, though the domestic ban on Russian participation stays in force. Pepco completed the sale of Dealz Poland, exiting food retail.

Other Economic Notes

Poland’s final Q1 GDP revision to 2.8 percent annual growth reduces downside risks to the outlook and supports domestic demand resilience. Hungary’s record FX reserves provide additional room to manage volatility while the economy shows signs of renewed optimism. Czech authorities continue to stress vigilance on inflation returning near target, aligning with broader euro-area price dynamics.

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Other Economic Notes (continued)

Romania maintains its 2029 euro-adoption timeline with steady convergence progress. Energy import dependence across the region leaves equities and currencies sensitive to Brent moves, which rose notably yesterday. Uzeltekhsanoat advanced talks with Poland’s Elkat on industrial cooperation, adding to cross-border supply-chain links.

Global Macro News

Eurozone CPI stood at 2.80 percent year-on-year in June while unemployment held at 6.20 percent in May, providing a stable external anchor for CEE currencies. ECB deposit rate remains at 2.25 percent, influencing rate expectations for CNB and MNB. Global equity rotation into emerging markets supported BIST 100 and Polish shares despite thin summer volumes.

Brent’s 4.26 percent jump adds to imported inflation risks for energy-dependent economies in the region. Bitcoin’s 1.50 percent decline and gold’s retreat signal modest risk-off flows that could pressure higher-beta assets such as the lira. Broader dollar stability kept USD/TRY contained near 46.99.

Any further ECB signals on September policy will likely transmit quickly to CZK and HUF crosses given their historical responsiveness.

Emerging Europe Central Banks Watch

NBP’s updated projections reinforce expectations of gradual disinflation, keeping the committee on hold while monitoring zloty weakness. CNB reiterated that monetary policy caution is warranted given inflation risks around the 2 percent target, consistent with its typical alignment to ECB moves. MNB highlighted record FX reserves that bolster credibility and reduce immediate pressure for intervention.

BNR continues steady convergence toward euro-area criteria with no deviation from its 2029 adoption path. CBRT faces structurally elevated inflation near 45 percent core, limiting room for easing and maintaining distinct policy constraints relative to the other four central banks. Policy divergence remains pronounced between Turkey and the EU-member group, where CNB and MNB show greater sensitivity to euro-area developments.

Emerging Europe Macro Daily(Beta Mode)