Erste Bank Research Team
Erste Bank
- October’s inflation rate in Serbia increased to 4.5% y/y.
- In Romania industrial production landed at -3.6% y/y.
- Later today, Czechia, Poland, Serbia and Romania will publish current account data.
- At the top of that Poland will release trade balance as well as exports and imports performance for September.
Economic developments
The ZEW Indicator of Economic Sentiment for Germany (that is expectations regarding economic development) declined in the November 2024 survey to 7.4 points. Assessments of the current economic situation in Germany are also increasingly pessimistic. The corresponding indicator fell 4.5 points and is now at minus 91.4 points, which is the lowest since the pandemic (in April and May 2020 the ZEW indicator bottomed out with values -91.5 and -93.5 respectively). This is the first assessment of market sentiment after the outcome of the US election. According to the statement, the outcome of the US presidential election is likely to be the main reason for the decline of the sentiment in Germany. The collapse of the German government is another factor that could have influenced economic expectations. In general, German economy clearly lacks the impulse for the recovery, as both ZEW Expectations and Current Situations Indicators have been following downward trend for the extended period of time. The uncertainty regarding Trump’s trade policies and its impact on economic growth only adds to negative assessment of economic situation.
This document is intended as an additional information source, aimed towards our customers. It is based on the best resources available to the authors at press time. The information and data sources utilised are deemed reliable, however, Erste Bank Sparkassen (CR) and affiliates do not take any responsibility for accuracy nor completeness of the information contained herein. This document is neither an offer nor an invitation to buy or sell any securities.
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EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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