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CEE Term Structures: Steeper In Poland and Hungary

EMERGING MARKETS
  • LT bond yields have been rising in Poland and Hungary recently amid growing concerns over inflation risks.
  • Several policymakers have expressed their concerns over rising inflationary pressures, expecting 2021 CPI inflation to be higher than what central banks and sell-side firms are currently estimating.
  • On the other hand, Czech term structure has been remarkably steady (slightly flatter) despite the higher than expected inflation print yesterday (April CPI rose to 3.1% vs. 2.7% exp.).
  • CNB is still expected to be the first CB to hike rates with market expecting a move as early as August (up to 3 hikes in 2021).

Source: Bloomberg/MNI

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