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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CEE
- In the past few months, the surge in inflationary pressures has led to a rise in volatility in the bond market in the CEE region.
- The chart below shows that the Hungarian and Polish term structures have shifted significantly to the upside, while the magnitude of the move was more important on the short end than on the long end of the curve for Czech Republic.
- As inflationary pressures are expected to remain elevated until at least the end of 2021, some sell side institutions continue to remain bearish on LT CEE bonds, currently appearing 'expensive' relative to historical levels.
- However, we have also seen that the economic uncertainty has been rising again with Eastern European economies preparing to enter new restrictions amid rising cases.
- As CEE governments have been constantly criticized over the poor management of the Coronavirus pandemic (last winter / spring), leaders will be more 'risk averse' this time to avoid losing popularity.
- Hence, preference for 'safe' assets such as government bonds could start to rise again in the coming weeks, leading to lower LT bonds yields and therefore flatter yield curves (despite rising inflation risks).
Source: Bloomberg/MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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