on the radar
-
Hungary's unemployment rate was reported at 4.5%.
-
At noon, Serbia will announce its real wage growth rate for August.
economic development
Yesterday, preliminary PMI figures for major countries including the euro area and Germany were released. The eurozone composite PMI rose slightly to 49.7, but remained just below the neutral threshold of 50 that distinguishes contraction from expansion. The euro area manufacturing PMI is still in contraction territory at 45.9, but this is the highest level in five months. Germany's manufacturing PMI was even more dire, registering 42.6. However, this is an improvement from September's figure of 40.6 and the highest level in three months. Services PMI also rose, becoming the only sub-index above 50, reporting a reading of 51.4 in October. Germany's composite PMI was 48.4, up 0.9 points from September. Interestingly, France, the second country in the eurozone to release preliminary PMI yesterday, reported an even lower headline PMI of 47.3, a nine-month low. In contrast, the UK's composite PMI and all sub-indices are firmly in expansion territory. Nevertheless, the most relevant figures for the CEE region still come from Germany and its struggling manufacturing sector.
market movements
The Czech koruna has been on a downward trend against the euro since the beginning of the week. EURHUF is trending at 403 and EURPLN is trending at 4.34. In the bond market, only Croatia and Slovakia have seen long-term yields fall slightly, while the rest of the curve has seen their long-term yields rise this week. Czech Central Bank Governor Prochaska continues to see room for monetary easing given the weak growth outlook, but will remain cautious about the scale of interest rate cuts. In Poland, the stance of MPC members remains unchanged despite the very weak economic performance in September, and early 2025 remains the most likely time for a first rate cut. Slovakia was unblocked from receiving EU funds by the European Commission.
Download the entire CEE macro every day
