CEE MARKETS – Currencies fall, most bond yields tend to fall

PRAGUE, Nov 14 (Reuters)Central European currencies eased somewhat on Monday, with investors continuing to watch for signs of when inflation could peak as most bond yields fell to the downside.

Bond markets corrected last week, led by Hungary, as yields fell as much as 200 basis points on longer-dated bonds. The rally was helped by the strengthening of the forint and hopes that the inflation peak was near.

Hungarian bond yields corrected slightly higher on Monday, while yields in Poland and the Czech Republic were mostly lower.

In Poland, the central bank was due to release its latest inflation report after saying last week’s price growth would return to a level at or near the target range in 2025.

The central bank of Romania he was also reporting his inflation outlook.

The Romanian leu EURRON = slightly loosened to 4.898 per euro, while the zloty EURPLN = it fell by 0.1% to almost 4.69 per euro, from a three-month low.

“The zloty benefits moderately from risk sentiment,” Alior Bank said. “With a slight correction in global optimism, a further strengthening of the zloty is unlikely.”

On global markets, equities pushed higher, strengthening central European stock exchanges. But after weaker-than-expected US inflation last week sparked hopes that the Federal Reserve could dampen rate hikes, a major US central banker warned investors against getting carried away by a number of inflation.

Currencies have been hit in previous months – before recent gains – due to economic worries amid Europe’s energy crisis and as Central European rate regulators seek to end rate hikes as global peers hike their rates.

The Hungarian forint fell from its nearly two-month high, down 0.5% on the day to 406.95 against the euro.

On Monday, the Hungarian central bank said, in an email response to Reuters questionsits one-day deposit rate of 18% was needed until there was a clear improvement in the risk environment.

The markets were also watching the developments taking place dispute over the rule of law between Hungary and the European Union while Budapest seeks to unlock EU funds.

“The decisive meetings related to both recovery and cohesion funds will be held during the week. We see the release of EU funds for Hungary as positive information for the market,” said Erste Group Bank.

Czech central banker Eva Zamrazilova said Sunday sentiment in the region was better and a return to heavy central bank intervention in defense of the crown was unlikely. The bank has kept rates stable over the past few months, but has stepped in to prevent the krona from weakening.

The crown EURCZK = it was stable at 24.28 per euro, around the highest level since before the Russian invasion of Ukraine in February.

EEC MARKETS

INSTANT

AT 1122 CET

CURRENCIES

Last

Previous one

Daily

Change

offer

to close

change

in 2022

EURCZK =

Czech crown

EURCZK =

24.2700

24.2810

+ 0.05%

+ 2.48%

EURHUF =

Hungarian forint

EURHUF =

406.9500

405.0000

-0.48%

-9.23%

EURPLN =

Polish Zloty

EURPLN =

4.6875

4.6810

-0.14%

-2.06%

EURRON =

Romanian leu

EURRON =

4.8975

4.8950

-0.05%

+ 1.04%

EURHRK =

Croatian kuna

EURHRK =

7.5430

7.5445

+ 0.02%

-0.34%

EURRSD =

Serbian dinar

EURRSD =

117.2000

117.2400

+ 0.03%

+ 0.32%

Note: daily change

calculated by

1800 CET

Last

Previous one

Daily

Change

to close

change

in 2022

.PX

Prague

.PX

1256.76

1258.9900

-0.18%

#VALUE!

.BUX

Budapest

.BUX

44046.12

43698.34

+ 0.80%

-13.16%

.WIG20

Warsaw

.WIG20

1723.04

1690.38

+ 1.93%

-23.99%

.BETI

Bucharest

.BETI

11642.12

11509.09

+ 1.16%

-10.87%

.SBITOP

Ljubljana

.SBITOP

1050.83

1043.21

+ 0.73%

-16.30%

.CRBEX

Zagreb

.CRBEX

1908.03

15.1914

-0.32%

-8.24%

.BELEX15

Belgrade

.BELEX15

779.20

780.00

-0.10%

-5.07%

.SOFIX

Sofia

.SOFIX

597.61

596.43

+ 0.20%

-5.99%

Product

Product

Difference

Daily

(offer)

change

against Bund

change in

Czech Republic

difference

CZ2YT = RR

2 years

CZ2YT = RR

5.8830

-0.3520

+381 basis points

-30 basis points

CZ5YT = RR

5 years

CZ5YT = RR

5.2660

-0.0090

+324 basis points

+5 basis points

CZ10YT = RR

10 years

CZ10YT = RR

5.0570

0.0530

+295 basis points

+11 bps

Poland

PL2YT = RR

2 years

PL2YT = RR

7.0760

-0.0500

+500 basis points

+0 basis points

PL5YT = RR

5 years

PL5YT = RR

7.4170

0.0210

+539 basis points

+8 basis points

PL10YT = RR

10 years

PL10YT = RR

7.1800

-0.0420

+507 basis points

+1 bp

FORWARD

3×6

6×9

9×12

3M Interbank

Czech Republic

CZKFRAPRIBOR =

7.13

6.88

6.54

7.26

Hungary

HUFFRABUBO =

13.90

13.46

12.40

15.71

Poland

PLNFRAWIBOR =

7.25

7.25

7.08

7.50

Note: quotation marks FRA

they are asking for prices

************************************************** ************

(Reporting by Jason Hovet in Prague, Anna Wlodarczak-Semczuk in Warsaw and Anita Komuves in Budapest; Editing by Emelia Sithole-Matarise)

((jason.hovet@thomsonmigration.com))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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