CEEMEA Economics & Strategy Daily: Israel CPI downside surprise, CEE foreign bond holdings

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CEEMEA Economics & Strategy Daily: Israel CPI downside surprise, CEE foreign bond holdings

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16 Jun 2026 06:22:44 ET │ 15 pages

CEEMEA Economics & Strategy Daily

Israel CPI downside surprise, CEE foreign bond holdings

CITI'S TAKE

Luis E Costa, CFA AC

We maintain a bullish bias on EMFX carry theme over the summer with oil +44-20-7986-9757

prices trending lower, and EM fixed income poised to do well as we have luis.costa@citi.com

ultra-hawkish scenarios priced out and replaced by shallow-to-none hiking

cycles in the front ends. Alexander Rozhetskin AC

+44-20-7508-4787

Global Macro – Risk rally continues as oil continues to trend broadly lower and EMFX alexander.rozhetskin@citi.com

trades well, with Asia rates and FX posting large gains on back of the SoH reopening. AC Bhumika GuptaWe continue to like the summer carry theme for EMFX, with oil and rates vol now

likely lower, but Fed guidance tomorrow remains key, as market watches for the lean +44-20-7986-5933

from Warsh. BoJ already raised rates, as did ECB last week, and we expect CNB to bhumika1.gupta@citi.com

follow on this week. However, we now expect these ‘hiking cycles’ to be much AC Nikola Apostolovshallower now, with ‘insurance’ hikes more likely than full hiking cycles as the pass-

through from energy prices can now be looked-through on a medium term basis. +44-20-7986-6499

nikola.apostolov@citi.com

Central Europe Economics — Foreign investors are still hesitant to significantly AC Katie Kirondeincrease their share in outstanding CEE local currency bonds, especially in Poland.

In Hungary and Czech Republic the share of non-residents increased slightly +44-20-7986-3315

towards ~30% recorded in April, whereas in Romania it slipped below 20% (in katie.kironde@citi.com

March). CEEMEA Economics