Central and Eastern Europe (CEE) witnessed a bustling week in the financial markets as government bond yields experienced an upward trend. This development comes ahead of the highly anticipated CEE Forum conference in Vienna, where investors, central bankers, and debt agencies are set to converge to discuss economic developments and market trends. As the region's financial landscape evolves, several countries have taken significant steps in issuing Eurobonds and preparing for key economic data releases.
In a noteworthy move, Slovenia issued a 30-year Eurobond valued at EUR 1 billion. Poland also made headlines by securing EUR 3 billion through the issuance of 5-year and 10-year Eurobonds. These actions underscore the region's active participation in the international bond markets as the new year begins with a flurry of bond issuances from the CEE.
Hungary joined the ranks by issuing two Eurobonds with maturities of 9 and 15 years, totaling EUR 2.5 billion. Meanwhile, Romania is preparing to reopen its government bonds maturing in 2028, 2030, and 2032. Similarly, Czechia plans to reopen its government bonds maturing in 2029, 2031, and 2037. These developments highlight the ongoing efforts by CEE governments to secure funding and manage their debt portfolios.
As the region focuses on inflation, several countries will release their December figures this week. Czechia, Hungary, Romania, and Serbia are expected to provide insights into their inflationary trends. This focus on inflation aligns with broader regional economic concerns as central banks in Poland and Romania prepare for their rate-setting meetings. Market analysts anticipate stability in interest rates for both countries.
In other economic news, wage growth data is slated for release by Slovakia and Romania. At the same time, Romania, Poland, Slovakia, and Serbia will publish trade and current account data. These reports are expected to offer valuable insights into the economic health and trade dynamics of these nations.
On the currency front, CEE currencies exhibited strength against the euro throughout the week. This performance contrasts with the EUR/USD pair, which has traded in negative territory for five consecutive days. The US Dollar's strength is attributed to upbeat US employment data for December, likely reinforcing the US Federal Reserve's stance to maintain steady interest rates in January.
The Serbian central bank has already set a precedent by leaving its key interest rate unchanged at its first rate-setting meeting of 2025. This decision reflects a cautious approach amid global economic uncertainties.