House prices return to growth all over CEE

Erste Bank Research Team Erste Bank

On the radar

Trade balance in Slovakia (August) arrived at EUR 141 million, in Croatia will be released at 11 (July).

Hungarian central bank will release the minutes form the meeting in the afternoon.

Tomorrow in the morning, Hungary and Czechia will publish August’s inflation rates.

Economic developments

In the second quarter of 2024, house prices increased by 1.3% y/y in the Eurozone and by 2.9% y/y in the EU. In the CEE region (CEE7 excluding Serbia), the growth of house prices was even more dynamic, as it reached an average of 8.5% y/y. Poland, Croatia, and Hungary saw the highest growth rates of house prices in the second quarter. In Poland, the growth was in double-digits and as high as 17.7% y/y. In Croatia and Hungary, it was close to 10%. The lowest growth dynamics, close to 4% y/y in the second quarter, were reported in Czechia and Slovakia. Moreover, only these two countries experienced a decline in growth rates between the second quarter of 2023 and the beginning of 2024. Over the course of 2023, the growth of house prices clearly bottomed out, and economic recovery is in line with further house price increases.

Market developments

Today, the Hungarian central bank will publish the minutes from the central bank meeting, during which the bank had decided to lower the key interest rate after the pause in August. As for October’s meeting, the recent volatility on the FX market may hold off the central bank with monetary easing according to Deputy Governor Virag. In Poland, the consensus among the MPC members to begin monetary policy in March 2025 has been growing. The MPC member Janczak admitted that if inflation and growth projections in March 2025 confirm that inflation peaked, the way to monetary easing opens. As for bond market-related news, the Polish Finance Minister commented that Poland targets reaching the 3% of GDP limit in the budget deficit in 2028 only, as it wants to avoid spending cuts. Today, the bond auctions will be held in Poland. The CEE currencies strengthened on Tuesday against the euro, while long-term interest rates showed little movement.

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.