Erste Bank Research Team
Erste Bank
On the radar
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Inflation in Croatia was published yesterday at 2.8% y/y (0.4% m/m).
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Today, the Hungarian National Bank holds its rate setting meeting.
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There are no other releases today.
Economic developments
It is well-known that Europe is gradually losing its dominance in car manufacturing. In our latest special report, “Prospects for the Automotive Industry in the EU and CEE”, we go deeper into the underlying reasons and the challenges arising from this trend. As of 2023, seven of the world's fifteen largest car manufacturing countries were still European. Additionally, Slovakia and Czechia hold the top two positions globally in terms of cars produced per capita. However, China has rapidly expanded its production capacities, increasing the number of cars produced by 68% since 2012. In the report, we identify three primary challenges that China presents to European car manufacturers. Firstly, European brands must enhance their competitiveness in the Chinese market, as they have been significantly losing market share in recent years. Secondly, China leads the EV market, necessitating substantial efforts for Europe to catch up. Lastly, China is significantly boosting its export capacity, with 16% of its cars being exported, making it already one of the largest global exporters. There are several ways how Europe can face these issues, some of which are also discussed in the Special report.
Market developments
On Monday, Mihály Varga has spoken as the nominee for the next governor of the central bank. He introduced his future colleagues: State Secretary of the Ministry of Finance, Benő Péter Banai, CEO of the Hungarian Development Bank (MFB) Levente Sipos-Tompa and Head of the Government Debt Management Agency (ÁKK) Zoltán Kurali. We see these nominations positively, as all three nominees are experienced professionals. On the market, yields in Hungary, Poland and Czechia went slightly up on Monday, while in Romania they decreased. The FX market was relatively calm yesterday, without major movements.
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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Will the Fed cut interest rates again and why is the dot plot important Premium
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