This week, financial markets are set to be influenced by critical economic indicators and policy developments. The US manufacturing sector's health will be under scrutiny with a pivotal report, serving as a vital indicator for industry watchers. As initial communications hint at the monetary policy direction for 2025, all eyes are on the European Central Bank (ECB) meeting, a key event anticipated by market participants. Notably, long-term yields have experienced a decline across the region over the past week, with Romania witnessing a significant shift of approximately 20 basis points. Meanwhile, Croatia and Czechia are gearing up to release flash inflation estimates for February, providing insights into regional economic conditions.
Central and Eastern European countries are preparing to release the GDP structure for the fourth quarter of 2024 and the entire year. These reports will offer a comprehensive view of economic growth and trends within the region. The combined size of both issues is expected not to exceed EUR 500 million. On the trade front, tariffs are set to impact Mexico and Canada on Tuesday, with additional tariffs targeting China, potentially influencing trade dynamics and market sentiment.
The manufacturing PMI indices remain below the threshold of 50, indicating a continued contraction in the industry sector. This trend underscores challenges faced by manufacturers amidst evolving market conditions. In Slovakia, a retail bond auction is scheduled for Monday, offering two-year and four-year maturities with coupons of 3% and 3.3%, respectively, attracting interest from investors seeking stable returns.
In currency markets, the EUR/USD is extending its daily recovery towards 1.0450 during the European session on Monday. Positive developments surrounding the peace deal between Russia and Ukraine have bolstered regional currencies, introducing optimism among investors. Hungary plans to sell T-Bills, while Poland is set to hold bond auctions this week, reflecting active participation in capital markets across Central and Eastern Europe.
In currency movements, the EURHUF briefly dipped below 400, while the EURPLN reached 4.12—the lowest level observed in a decade. These shifts highlight the dynamic nature of foreign exchange markets amid geopolitical and economic developments. Romania’s Ministry of Finance has also indicated a gross funding need for 2025 amounting to RON 232 billion, showcasing fiscal planning efforts amidst evolving economic landscapes.