To read the full version of this content please select one of the options below:

Fed and ECB will ease Central European policy dilemmas

Monday, June 24, 2019

Subject

Impact of global policy shifts on monetary policy in Central Europe.

Significance

The dramatic decline in euro-area government bond yields has helped push down yields across Central Europe, with bond markets now pricing in interest rate cuts in the Czech Republic, only a month after the Czech National Bank (CNB) increased borrowing costs to 2%. However, the scope for monetary stimulus in Central Europe is limited, thanks to inflationary pressures.

Impacts

  • MSCI’s index for Polish, Hungarian and Czech equities is rising, despite a slight loss for the broader emerging market index.
  • Government bonds are rallying sharply in both developed and developing economies as ten-year US Treasury bonds fall.
  • The Brent crude international oil benchmark has reached 65 dollars/barrel thanks to escalating US-Iranian tensions and dollar weakness.
Expert Briefings Powered by Oxford Analytica
Stay up to date
Sign up to the Expert Daily Briefings email alert and receive up-to-the-minute analysis of global events as they happen.
*If your university does not have access to Expert Briefings, visit our information page to find out more.