PBZ Weekly Analysis. Number 494, November 9, Weekly overview (p. 1) EUR/USD below 1.08 (p. 3) Money market at standstill (p.

Transcription

1 PBZ Weekly Analysis Number 494, November 9, 215 Weekly overview (p. 1) EUR/USD below 1.8 (p. 3) Money market at standstill (p. 4) Crobex in negative territory (p. 4) Statistics and macroeconomic forecasts (p. 4-5)

2 HR ES EL FR UK PT RO PL BG FI BE DK Sl SK IT HU EU28 AT IE NL CZ LT SE LV MT CY EE DE LU EE LU BG DK LT RO CZ LV SE PL SK MT FI NL DE HU Sl AT EU28 UK HR IE FR CY ES BE PT IT EL EL FI BE CY FR HR AT BG IT PT DE Sl DK EU28 NL CZ HU UK EE ES SE LT SK LV LU PL MT RO IE DE CZ UK MT DK LU AT EE NL RO HU PL SE BE LT IE EU28 Sl BG FI LV FR SK PT IT CY HR ES EL Weekly overview Yesterday's parliamentary elections pushed the country into a new period of uncertainty. Due to a tie between the two largest coalitions (both "Patriotic Coalition" and "Croatia is growing" won 59 seats), a new government will be formed only with a support of 19 seats won by MOST, a list of independent candidates who claim that they will support either of the two indicated coalitions only if they are ready to conduct reforms. The European Commission autumn forecast: GDP, real growth rate forecast Source: EC 3 Unemployment rate forecast Source: EC 2 3, 1, 1 1-1, - 1, General government balance, GDP forecast Source: EC 2 18 Public debt, GDP forecast Source: EC 16-1, , In August, the export of goods decreased by.3 (HRK) i.e. increased by.2 (EUR) compared with the same month of 214. At the same time, the import of goods grew by 5.2 (HRK) i.e. 5.8 (EUR; average EUR/HRK exchange rate was down by.9 in August 215). Thus, the coverage of imports by exports fell to 56.3 in August, which is the lowest coverage level in the past 15 months. Cumulatively, over the first eight months, the export rose by 1.9, and the import by 6.6. According to NKD, the export recorded an increase in the majority of activities, except the manufacture of tobacco products (-5.5) and metals (-26), as well as (mainly due to the influence of a decrease in prices) refined petroleum products (- 18.4). The main trends are shown on the Manufact. articles Machinery & transp.eq. Manuf.goods by materials Chemilcals Anim.& veg.oils Mineral fuels Crude materials, ex.fuels Bevrages & tob. Food & live an. Total -1,7 Merchandise exports, yoy change -3,2-1,2 1,6 4,1 3,3 3,9 8,5 1,6 7,9 8,1 11, 1, ,9 2,2 21,1 24,1 27,7 38,2 I-VIII 15/ I-VIII 14 import side, where a decrease was recorded by the manufacture of metal (-1.2), refined petroleum products (-15.6) as well as mining and quarrying (-22.5). 214/213 1

3 213M1 213M2 213M3 213M4 213M5 213M6 213M7 213M8 213M9 213M1 213M11 213M12 214M1 214M2 214M3 214M4 214M5 214M6 214M7 214M8 214M9 214M1 214M11 214M12 215M1 215M2 215M3 215M4 215M5 215M6 215M7 215M8 213M1 213M2 213M3 213M4 213M5 213M6 213M7 213M8 213M9 213M1 213M11 213M12 214M1 214M2 214M3 214M4 214M5 214M6 214M7 214M8 214M9 214M1 214M11 214M12 215M1 215M2 215M3 215M4 215M5 215M6 215M7 215M8 215M9 The preliminary data of the Croatian Bureau of Statistics show that retail trade in September climbed by 1.3 (wda) compared with the same month of the previous year, while turnover fell by.3 in nominal terms. Compared with August 215, the retail trade turnover stagnated in nominal terms, while the real turnover recorded a seasonally adjusted growth of.3. As details will be revealed in a midweek release, from this we may conclude that the retail trade increase is a result of a growth of real disposable income, due to tax relief on net wages and lower prices of petroleum products, but also due to a good and extended tourist season. The upcoming months will see a continuation of positive trends, however, by the end of this year and in the early 216 they will show less dynamics, due to the equalisation of the base tax relief entered in force in January 215, while the decline in petroleum product prices began at the end of 214, therefore the annual rates of change will be less pronounced (assuming that there will be no external shocks). The expectations regarding 25= Prices of fuels for personal trans. equipment, 25=1 Source: Eurosta yoy Fuels and lubricants for personal transport equipment Av. net wage- in hrk and real yoy ch. Source: DZS Net wage Real growth rate (rhs) Ø 213 Ø 214 Ø 215 (I-VIII) Consumer and Retail trade confidence indicators Source: DG ECFIN -6 V.28 I.29 I.21 I.211 I.212 I.213 I.214 I.215 the continued positive movements are supported by the movements of consumer confidence index and retail trade confidence which have recorded highest level since the beginning of monitoring. However, when formulating expectations we remain cautious, as high unemployment, particularly youth unemployment, is still the main limiting factor for the recovery of personal consumption. HR.CONS HR.RETA

4 EUR/USD below 1.8 As a result of the expectations that December will see a change in the USA monetary policy and the ECB QE expansion, as well as the release of the macroeconomic indicators, the dollar strengthened and the market movements closed on Friday at dollar to the euro, i.e. down by 2.4 wow, while the Swiss franc closed the week at 1.84 franc to the euro, down by.6 wow. EUR/ USD Izvor/ Source: Bloomberg EUR/ CHF Izvor/ Source: Bloomberg 1,22 1,2 1,18 1,16 1,14 1,12 1,1 1,8 1,6 1,4 1,2 1, 1,22 1,2 1,18 1,16 1,14 1,12 1,1 1,8 1,6 1,4 1,2 1,,98,96 The domestic market mainly saw appreciation pressures and the EUR/HRK exchange rate at the end of the week amounted to kuna to the euro, i.e. down by.5 wow. The kuna weakened against the dollar (by.7, to ) while the kuna against the Swiss franc remained unchanged and the exchange rate on Friday amounted to kuna to the franc. 7,74 EUR/ HRK 8, USD/ HRK and CHF/ HRK 7,72 7,7 7,68 7,66 7,64 7,8 7,6 7,4 7,2 CHF/ HRK USD/ HRK 7,62 7, 7,6 6,8 7,58 6,6 7,56 6,4 7,54 6,2 7,52 6, 3

5 Money market at standstill Lower trading volume and liquidity around 6 billion kuna still affect interest rates, therefore, the overnight Zibor closed the week at.82 (vs.92), while 1M and 3M at 1.22 (vs 1.25), and 1.45, respectively (vs 1.66 the previous week) T-bills Source: MoF 2,5 1,5 1,,5 2,6 2,5 2,4 2,3 2,2 2,1 1,9 1,8 1,7 1,6 1,5 1,4 1,3 1,2 1,1 1,,9,8,7,6,5,4,3,2 ZIBOR Izvor/ Source: Reuters Total outstanding, HRK mill 1Y HRK interest rate 1Y EUR interest rate O/ N 1W 2W 1M Crobex in negative territory Last week, the Crobex closed at 1,714.7 points, i.e. losing.6 wow, whereas the Crobis closed the week at a.3 higher level, i.e. at 15.5 points. The total ZSE turnover was 26 lower wow, amounting to 276 million kuna. Crobex Izvor/ Source: ZSE Crobis Izvor/ Source: ZSE , 18,5 18, 17,5 17, 16,5 16, 15,5 1 14,5 1 4

6 21=1 yoy mill, yoy 21=1 yoy 21=1 yoy Statistics and macroeconomic forecasts Industrial production, wda yoy ch. Source: Eurostat Retail trade, real, wda yoy ch IND_wda IND_trend RETAIL TRADE TOTAL_wda RETAIL TRADE TOTAL_trend Construction works, yoy ch. and index 21=1 Goods exports and imports (yoy ch. and mill ) wda yoy change (right) trend index 21=1 (left) Imports (mill, left) Exports (mill, left) Imports (yoy ch., right) Exports (yoy ch., right) External debt, amount and share to GDP Sources: CNB, CBS, PBZ General government debt Total, EUR mill External debt/ GDP (rhs) GG debt (hrk mill.- left) GG debt ( GDP - right) 2 Employment, yoy rate of change and unemployment rate, 5.8 Net wages: amount and real yoy rate of change 6, 2 18, , , 5.2 6, , -8, , Employment, yoy rate of change Unemployment rate, registered Net wage, HRK Real yoy change (rhs) 5

7 Prices, yoy change Sources: CBS, CNB 5Y CDS Spread, bps Source: Bloomberg , 3 6, , -8, CPI PPI, domestic market Core CPI Croatia Hungary Romania Bulgaria 1 8, Loans, yoy change 3 18, 16, Deposits, yoy change 6, , - 1 6, - -6, -8, , , Total Non-financial corporations Total Non-financial corporations Households 3,5 Interest rates on short-term time deposits (new business), 7,5 Interest rates on long-term loans, fx clause, euro (new business), 3, 7, 2,5 6,5 6, 1,5 5,5 1,,5 4, Households, euro Non-financial corporations, kuna Housing loans Loans to non-fin corporations 6

8 RESEARCH OFFICE Ivana Jović Ana Lokin Ivan Odrčić TRESAURY Eugen Bulat LEGAL DISCLAIMER This publication is issued by PRIVREDNA BANKA ZAGREB-DIONIČKO DRUŠTVO, Zagreb, Radnička 5 (hereinafter: PBZ) and aimed at clients of the PBZ Group. This publication is intended for information purposes only and may not in any way be considered an offer or invitation to purchase any property or rights mentioned in it. The informative nature of this publication means that it may not serve as a substitute for the personal judgment and assessment of any reader or anyone who receives this publication. The information, opinions, analyses, conclusions, forecasts and projections given here are founded on publicly available data whose accuracy PBZ relies on, but cannot guarantee. Accordingly, all the opinions, attitudes, conclusions, forecasts and projections given in this publication are subject to changes, which depend on changes to the data as published by the source used. PBZ allows further utilization of the data given in this publication on the condition that the publication is indicated as the source. All the property mentioned in this publication and whose movement is the subject of comment may from time to time be the subject of trade or positions taken by PBZ. 7