don’t take your eyes off the tightening cycle
1Q data so far has brought further good news for CEE: industrial production is up, retail sales growth is strong, wages are accelerating and confidence is high. We expect the flash estimate for 1Q GDP to show a sharp acceleration across all countries. Rate hikes expectations have been scaled back by the market in the past month, led by a push back of the timing for the first ECB hike to late-2018E. We believe that the market has overshot on the dovish side, and pricing power surveys are signalling that inflationary pressures are building everywhere, including in the Eurozone. As a result, we reinforce our call for the beginning of the monetary tightening cycle in the next six months. However, the situation in Greece has deteriorated materially in the past three months, and our GDP model signals that 1Q may be as bad as -1%yoy, which would significantly raise the risk of no recovery this year, in our view.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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