Czechia takes the spotlight this week with its upcoming central bank meeting, where another 50bp cut is expected. Despite inflation hitting the central bank’s target in February, the Czech koruna remains weak, restraining a faster pace of monetary easing. Meanwhile, Poland is set to release industrial output and retail sales growth data for February, along with producer prices. Labor market updates, including unemployment rates and wage growth, will be unveiled in Croatia, Poland, and Slovakia. Additionally, Slovakia will hold its presidential elections over the weekend, with two frontrunners vying for victory.

In FX markets, the Hungarian front experienced volatility due to conflicts between the government and the central bank, initially pushing the EURHUF higher. Still, it later receded after the decision to postpone legal changes. The Czech koruna and Polish zloty strengthened against the euro over the past week.

Looking ahead, the Czech central bank meeting remains pivotal, with further easing expected, albeit cautiously, due to currency dynamics being considered pro-inflationary. Bond markets saw an uptick in CEE government bond yields last week, reflecting the trend in US Treasuries triggered by higher-than-expected inflation. Notably, Poland and Slovenia tapped international markets with their syndicated bond issues. This week, Slovakia, Czechia, Romania, and Hungary are scheduled to conduct bond auctions and offer T-bills.

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