CEE currencies slightly eased yesterday, giving up part of their last week´s gains. The trading volume was thinner due to the Early May Bank Holiday in the UK. Although the most watched event in the region – a NBP 2-day meeting - concludes only on Wednesday, today’s macroeconomic releases are worth watching as well. March industrial production fell both in the Czech Republic and Hungary. In Hungary, industrial output adjusted for working days dropped by 0.7 % y/y, following a 1% decline in February. Preliminary data show that contraction hit nearly all industrial segments. The only exception was automotives, owing to a new Mercedes plant.
For the Czech Republic, data on March industrial output were a negative surprise. Industry fell 6 % y/y, the working day adjusted drop was 2.1 %. Unlike in Hungary, a huge slump was seen in the largest industrial sector – production of cars and their spare parts. On the one hand, industrial data confirm that the Czech economy has not been out of the woods yet, but, on the other hand, the same data set testifies that the current economic decline is far from being dramatic – in m/m terms, the March industrial slip amounted to a mere -0.2%.