Car registration dynamics slow down

Erste Bank Research Team Erste Bank

On the radar

In Poland, industrial output growth declined by -0.3% y/y in September. Producer prices went down by -6.3% y/y. Employment dropped by -0.5% y/y while wages increased by 10.3% y/y
Producer prices in Slovenia declined by -0.9% y/y in September.
In Croatia, September’s unemployment rate declined to 4.6% while August’s real wage grew by 11.9% y/y.
In Hungary, real wage growth arrived at 9.4% y/y.
Today, there is Hungarian central bank meeting, and we expect no change in key policy rate.
In Poland, real retail sales will be published for September at 10 AM CET.
Slovenia will publish real wage growth for August.

Economic developments

In September 2024, new EU car registrations continued their downward trajectory (-6.1%) with negative results across three of the region’s four major markets: France (-11.1%) and Italy (-10.7%), with the German market declining by 7%. Year-to-date performance remains marginally positive in the EU. As far as the region is concerned, the growth was negative in three countries in September 2024. Hungary had a slight decline (-0.5%), while Romania and Slovakia experienced the greatest slumps (-14.9% y/y and -7.8% y/y respectively). Other countries saw positive growth dynamics in September 2024. Year-to-date, new car registrations are higher in all countries. Croatia and Poland have so far outperformed their peers with double-digit growth dynamics. Hungary and Slovenia have also shown solid year-to-date performance.

Market developments

CEE currencies weakened against the euro at the beginning of the week, while long-term yields edged slightly up apart from Croatia and Romania. Today, the Hungarian central bank holds a rate-setting meeting, and we expect no change in the key policy rate due to the weakness of the Hungarian forint. Deputy Governor Virag suggested such a scenario, indicating a break in monetary easing. Furthermore, it seems that the break may last for a "sustained period" if the external environment and inflation outlook justify a cautious approach. It will be interesting to hear the statement and comments from the central bank after the decision. Romania held a successful bond auction of 2029 government papers, selling more than planned (RON 990.1 million).

Download The Full CEE Macro Daily

Author

Erste Bank Research Team

Erste Bank

At Erste Group we greatly value transparency. Our Investor Relations team strives to provide comprehensive information with frequent updates to ensure that the details on these pages are always current.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.