Financial markets in Emerging Europe have rebounded following this summer’s turmoil. Equity markets (Turkey aside) have rallied by around 8% or more this month, while the region’s currencies have appreciated by a similar amount against the euro. However, the bounce in financial markets has not been matched by an improvement in the economic data. In fact, leading indicators suggest that growth slowed across much of the region in Q3, with worse set to come in Q4. The exception is Russia, where growth appears to have picked up pace in the third quarter. Meanwhile, Poland remains a comparatively bright spot in Central Europe – the economy appears to have expanded by 0.4% q/q in Q3, down from the 1.1% q/q recorded in Q2, but nonetheless faster than the pace of growth seen elsewhere in the region. Hungary, by contrast, appears to be flirting with recession.