The Slovak koruna was steady against the euro. It failed to react to the released retail sales, industrial production and wages. However, the market will get new box of information today. The government decided to appeal to a constitutional court over the President rejection of its nominee Mr. Tvaroska for a central bank post. It is a bad news but not necessary an immediate threat for the currency. But more importantly, there is a higher probability that the central bank will get under political pressure in the future.
The investment agency SARIO and PM Dzurinda officially confirmed the interest of the new investor in auto sector to invest around SKK 16 bn in the eastern part of the country. Anyway, SKK did show any reaction. We think that investors are very cautious ahead of the parliament elections scheduled for next Saturday. The left-wing Smer is still leading but loosing slightly in the days. On the other hand, the right wing parties strengthened their position. The risk appetite may recover today as the Turkish lira strengthened overnight. We expect calm trading with the tendency to modest firming today.
(CSOB - Investment research)