NBP Holds as Turkish Inflation, Deficit Diverge

RoboMacro ResearchAlso todaySee the FI Daily

NBP Holds as Turkish Inflation, Deficit Diverge

2.58 Inflation Rate29.77 Inflation Rate-6,700m Balance of Trade Prel3.75 Central Bank Interest

BIST 10011,478.10+4.12%

iShares Poland43.98+3.07%

EUR/PLN4.39-0.52%

EUR/HUF361.86-0.56%

Market Snapshot

Asset	Level	Change
BIST 100	11,478.10	+4.12%
iShares Poland	43.98	+3.07%
EUR/PLN	4.39	-0.52%
EUR/HUF	361.86	-0.56%
EUR/CZK	24.28	-0.24%
USD/TRY	50.04	+0.06%
Brent Crude	93.90	-0.76%
Gold	4,142.20	+1.70%
Bitcoin	80,345.47	+3.88%
Poland 10Y Govt Yield	-	-
Hungary 10Y Govt Yield	-	-

Prior Economic Events

Data	Prior	Cons	Actual
Inflation Rate Month-over-Month	1.84	2.40	2.58
Inflation Rate Year-over-Year	29.73	29.56	29.77
Balance of Trade Prel	-5,160m	-	-6,700m
Central Bank Interest Rate Decision	3.75	3.75	3.75

Today's Economic Events

Data	Prior	Cons	Time
No events available

NBP held its policy rate at 3.75% on November 4, in line with consensus, keeping Poland's easing cycle paused amid CPI at 3.21%.
Turkish CPI printed 2.58% m/m and 29.77% y/y, above consensus, while the preliminary trade deficit widened sharply to -$6.7bn.
Regional FX firmed against the euro (EUR/PLN -0.52%, EUR/HUF -0.56%), with BIST 100 surging 4.12% and iShares Poland up 3.07%.

Yesterday's Recap

Turkey dominated yesterday's data flow, and the prints were uncomfortable. November 3 releases showed Turkish CPI at 2.58% m/m against a 2.4% consensus, with the y/y rate at 29.77% versus 29.56% expected — a marginal upside surprise that keeps the CBRT's disinflation path under scrutiny. The preliminary trade balance deteriorated to -$6.7bn from -$5.16bn previously, a widening gap that complicates the external adjustment story.

Poland's NBP rate decision on November 4 delivered a hold at 3.75%, exactly as consensus expected, leaving the policy rate effective since March 5 unchanged. Markets read the Polish hold as neutral-to-dovish given CPI at 3.21%, and Polish assets rallied hard: iShares Poland gained 3.07% and EUR/PLN fell 0.52% to 4.39. The forint also strengthened, EUR/HUF down 0.56% to 361.86, while EUR/CZK edged 0.24% lower to 24.28.

BIST 100 was the standout, up 4.12% to 11,478.10, even as USD/TRY held near 50.04 (+0.06%).

The Day Ahead

The Emerging Europe calendar is empty for both today (November 5) and tomorrow (November 6), so price action will be driven by positioning around yesterday's Turkish inflation surprise and the Polish hold. With no domestic prints to anchor trading, regional FX and rates will likely take their cue from euro-area and global risk sentiment. The next scheduled event risk sits further out: MNB's November 17 meeting and CNB's December 17 decision are the nearest central bank catalysts.

In the interim, markets will watch whether the lira can hold the 50 level against the dollar and whether the zloty's post-NBP strength persists. Turkish trade and inflation follow-through will be monitored for signs the deficit widening is structural rather than seasonal.

Other Economic Notes

Hungary's policy backdrop is generating notable commentary. Portfolio.hu reports an Erste view that Hungary's mortgage market could contract by HUF 1,000bn, with the banking sector still awaiting a structural overhaul, while the Otthon Start program has doubled mortgage uptake in recent weeks — pulling forward demand. Separately, Virovácz Péter argues the Hungarian base rate could be frozen for as long as a year and that the forint is settling into a narrow band, with asset prices now driven mainly by global conditions rather than domestic policy credibility.

↓ p.2

Page 1

Electricity Price Industrial (EUR/MWh TRY equiv)

Other Economic Notes (continued)

Hungary also released communist-era secret police files, a political rather than market event but one that reinforces the reformist institutional narrative. Turkey's widening trade deficit remains the key regional vulnerability, given its energy import dependence and the lira's managed depreciation.

Global Macro News

The dominant global theme is the US midterm outcome, where Republicans lost both Houses — a result Axios describes as the biggest midterm wave in 50 years. Markets are parsing the implications for fiscal policy and the inflation fight; Seeking Alpha notes a stronger economy may complicate the Fed's disinflation task. The pound extended its rally on the Republican losses, a signal of broad dollar softness that typically transmits favorably into CEE currencies.

Gold jumped 1.70% to $4,142.20 and Bitcoin rose 3.88% to $80,345, both consistent with a weaker-dollar, risk-on impulse. Brent crude slipped 0.76% to $93.90, modest relief for energy-importing Emerging Europe. The Bank of England's restrictive stance is drawing criticism domestically, but for CEE the more relevant read is the euro-area growth backdrop and ECB trajectory, which anchor CNB and MNB reaction functions.

Emerging Europe Central Banks Watch

The NBP's November 4 hold at 3.75% confirms Poland's easing cycle is on pause, with CPI at 3.21% leaving limited room for near-term cuts. ↓ p.3

Continuation

Emerging Europe Central Banks Watch (continued)

The CNB's policy rate stands at 3.75%, set at the June 18 decision and reaffirmed at the September 17 hold, with the next meeting December 17; Czech CPI at 2.51% keeps the CNB comfortably near target and attentive to ECB moves. The MNB's 5.50% rate, set August 25 and held October 20, sits well above regional peers despite Hungarian CPI at just 1.54% — a real-rate gap that reflects forint-defense priorities and credibility concerns, with the next meeting November 17. The BNR's 6.50% remains the highest in the EU cohort, reflecting Romania's persistent inflation and fiscal pressures.

The CBRT operates under distinct political constraints: Turkish CPI at 29.77% y/y keeps real rates deeply negative and the lira managed, with the trade deficit widening. Divergence is stark — Hungary and Romania run high real rates, Czechia and Poland sit near neutral, and Turkey remains the outlier.

Emerging Europe Macro Daily(Beta Mode)