The industrial output and PPI data were
pushed to the sidelines as the Polish zloty
suffered at the hands of the Hungarian forint
and domestic politics on Tuesday. The
Hungarian contagion saw the EUR/PLN pair
drop from 3.94 at the opening to the
3.96 later in the day and with Gyurcsany’s
fiscal package potentially under threat the
situation in Hungary should stay in the focus
of market attention in the coming days. In
the meantime both the industrial output and
PPI numbers came in slightly below the
consensus estimates, but were completely
ignored by the market (see more in the fixed
income part).
Apart from the potential downside for
emerging markets from Hungary and
Thailand we should see more range trade
today, as the market gears up for the all
important Fed decision on rates. On the
domestic front tensions remain elevated
within the government coalition and news
regarding the (informal) cabinet meeting on
the budget should get ample attention as
well, as some speculate it could tip the scale
toward earlier elections.
(CSOB - Investment research)