Czech new industrial orders disappoints, the Polish zloty stronger on Asia inflows

The Polish zloty quite surprisingly strengthened and touched to the 4.15 EUR/PLN level despite discouraging US jobs report. Polish Deputy Finance Minister Wojciech Kowalczyk said on Friday that inflows from Asia to the debt market rose significantly after the Bank of Japan announced aggressive monetary easing plans on Thursday. It makes sense as the Polish bond market is relatively safe, offers solid liquidity and in compare with neighbouring EU countries still provides attractive yield - 3.5% at 10 years.

Meanwhile the Czech eco figures were slightly disappointing. Although seasonally adjusted industry more or less met the consensus and slightly rose from January lows, new orders were disappointing and declined 10.2 % y/y. The worst performing industry were car manufacturers. Their new orders provide key input to our Flash leading indicator for the Czech economy. Putting these together with the weaker German Ifo, it is difficult to believe in solid recovery in the first half of
2013.

Meanwhile in Hungary, Ádám Balog, Vice President of the NBH said the central bank has no further plans to boost the economy and the ECB has no objections against the measures announced last week. György Matolcsy, President of the NBH holds talks with representatives of eight major Hungarian banks to discuss the details of the new funding for lending program. The forint continues to strengthen after the announcement of the program and it has begun to trade at EUR/HUF 298 this week.