Key Data Releases This Week
Poland’s March inflation data is expected on Tuesday, with a rise from 2.1% to 3.5% year on year. That would be above market expectations and near levels seen in mid-year last year. CEE March PMI figures are due on Wednesday. They are not expected to fully reflect the US-Iran conflict, though the risk is described as skewed lower than market expectations. Turkey’s inflation data is due on Thursday, with a projected slowdown from 3.0% to 2.2% month on month. Year-on-year inflation is expected to rise from 31.5% to 32.2% after the fuel shock. We are seeing markets open with a risk-off mood in the CEE region, driven by geopolitical headlines and further pressure on central bank rate hike pricing. With Brent crude now hovering above $95 a barrel, the highest this year, we expect this energy shock to weigh on regional assets. This environment suggests being cautious on CEE currencies through the coming weeks.Implications For Cee Currencies
This pressure supports further yield curve flattening and places a burden on currencies like the Polish Zloty and Hungarian Forint. We believe the market’s pricing of future rate hikes will be tested, especially as persistent inflation forces central banks to maintain a hawkish stance despite slowing growth. The recent hawkish hold from the National Bank of Poland underlines this difficult balancing act. Attention now turns to the March inflation figures for Poland, which will be released this week. After February’s data surprised to the upside, coming in at 5.1% YoY, we anticipate another high print that will fuel expectations for more tightening and pressure the PLN. This trend is a significant acceleration from the more moderate inflation levels we saw for much of 2025. Looking at the broader region, the latest manufacturing PMI numbers for February were already showing contraction, with readings below 50 for Poland, Hungary, and the Czech Republic. The ongoing energy price shock suggests the March PMIs, due shortly, will likely reflect a further downside risk to economic activity. This stagflationary pressure is a clear negative for the region’s currencies. In Turkey, the situation remains acute as we await this week’s inflation data. With year-on-year inflation already running above 65%, a figure confirmed by recent data from the Turkish Statistical Institute, any further fuel price impact will only worsen the outlook. This continues to create extreme downward pressure on the Turkish Lira. Create your live VT Markets account and start trading now.
Start trading now – Click here to create your real VT Markets account
