Russia’s fiscal tightening, Romania under pressure

The details of Russia’s 2027 budget point towards fiscal austerity, but it’s hard to view this as credible given spending pressures, particularly for the military. So there’s little reason to expect a meaningful easing of the government’s financing pressures. Political instability in Romania this week will add to fiscal concerns, and could put further pressure on the currency and bonds. Finally, although the Polish MPC will almost certainly leave rates on hold at its meeting on Wednesday, the tone may shift more hawkish and a hike in November is possible.