Regional PMIs show diverging tendencies within the region. Polish PMIs surprisingly turned back above 50, level indicating expansion. It rose for the first time since October and posted the third steepest one-month gain in the survey history to 52.2, from 48.8. What is maybe even more important is the fact that while the production continues to decline, new orders have rebounded significantly. That is one of the indicators usually pointing to the bottoming in the cycle and similar tendency can be seen in overall eurozone PMIs as well. On the other hand Czech PMIs struggled to rise after moderate improvement in December. PMIs fell slightly from 49.2 in December to 48.8 in January, indicating contraction in the economy at the beginning of 2012. What is more disturbing is ongoing weakness in new orders. Despite the minor improvement, the new orders index remains at a particularly low level (47.1). That may partly reflect slowing demand for car industry products that was very solid over 2011. Divergence in the economic activity may also partly contributed to recent outperformance of the Polish zloty towards the koruna. PLN/CZK is back above 6.00, levels last seen in the summer 2011. Series of rather supportive news from Poland lead investors to price out bets on interest rate cuts which is favourable for the Polish currency. On the other hand, Czech markets continue to rather favour the possibility of decline in interest rates.