EME Macro/Strategy: macro all-in-one (1-7 July)

In this report, we resume our macro weeklies, with a slightly different format, to allow for the better monitoring of the economic cycle of our core countries of interest. Last week, in Poland, the Central Bank kept the policy rate unchanged, and raised the possibility of an extension of the current stance until 2026E, on the back of a sharp rise in its food and energy inflation forecasts. In Romania, the MPC began the easing cycle with a 25bps cut, and the government set the dates for the Presidential election, which will begin on 24 November, and the general election, due on 1 December. In Hungary, State Secretary Máté Lóga emphasised, in a press article, the government’s strategy of self-funding, and noted that local banks have gained profitability by rearranging their sovereign bond ownership to reduce their tax bills. Eurostat released the 1Q estimates for house prices and rent, which are accelerating across the board. House prices and households’ inflation expectations are inflationary factors at this juncture, while the data on retail spending and the industrial sector point in the opposite direction.