Recent volatility proves central Europe convergence is not over

Since joining the European Union just over 12 months ago, central European markets have delivered impressive returns. Yet recent volatility has raised the question as to whether the re-rating of central Europe is fully played out on the stockmarkets or whether there is further to go in the convergence story. The ongoing improvements to the region's macroeconomics over the past couple of years have led to further interest rate cuts this year, which have underpinned domestic liquidity and boosted local consumption. The Czech Republic has recently posted its largest balance of trade surplus...