- Average gross wage in Hungary increased by 9.1% in March.
- Producer prices accelerated to 1.0% y/y in April in Czechia.
- Unemployment rate remained flat at 5.2% in Slovakia in April.
- Today, Poland releases industrial output growth in April, producer prices, wage and employment growth at 9.30 AM CET.
- Slovenia is scheduled to publish producer prices in April, while Slovakia will show current account balance at 10.30 AM CET.
Economic developments
As Hungary’s Prime Minister travels to Poland, we look at the evolution of sovereign spread differentials between Hungary (HU) and three regional peers—Czechia (CZ), Poland (PL), and Romania (RO) that reveals a pronounced and synchronized phase of spread compression across all three pairs from early 2026 onward. Spread between Hungary and Czechia was initially elevated at around 250–300 basis points through most of 2025 and sharply compresses from March 2026 onward, reaching approximately 60–70 basis points by May 2026. Spread against Poland turned negative, while against Romania moved into negative more visibly. Such development suggests quite aggressive pricing of gaining the EU funds and Eurozone membership. The 10Y yield in Hungary is as low as 5.5%, while eurozone countries from the region (Slovakia or Slovenia) have the long-term yields between 3.5% to 3.7%. The commitment to adopt the euro is firm at the moment, but no formal steps have been undertaken so far. Looking at the two countries that joined the Eurozone most recently (Bulgaria and Croatia), several years passed between Banking Union membership (the first formal step in the process) and actual euro adoption.
Market movements
Situation on global markets remains heated with Iran threatening to retaliate in case of the US attack. The Czech Koruna and Hungarian forint however, strengthened slightly this week while EURPLN holds at 4.24. On the bond market, yields have been mostly falling. Poland Ministry of Finance plans to issue CHF-denominated benchmark. In Romania, Governor Isarescu warned that prolonged delays in forming a new government would be detrimental. Central bank is ready to allow for bigger flexibility of the exchange rate. Although it seems that leu have reached an area of equilibrium according to Isarescu. Croatia’s Finance Minister announced that broader anti-inflation package will be unveiled next week, targeting multiple sectors and aiming to “cool” aggregate demand. Finally, European Parliament adopted second resolution in three weeks calling on the Commission to consider freezing Slovak EU funds over rule-of-law and EU-budget protection concerns.