Band Kristina Than

BUDAPEST, June 1 (Reuters) – The Hungarian Forint EURHUF= rebounded slightly midday on Wednesday from previous falls after Tuesday’s central bank meeting, when the bank raised its benchmark rate by 50 basis points to 5.9%, half the pace of increases in those last months.

Even though the National Bank of Hungary has announced that it will continue to raise rates, including its one-week deposit rate, and the Hungarian government has embarked on fiscal tightening to bring the budget deficit under control, investors consider the forint as an underperformer amid soaring and worsening inflation. growth prospects in Central Europe.

the forint EURHUF= was 0.1% higher at 395.55 at 10:33 GMT, reversing losses that took the currency to 398.20 against the euro earlier in the day, a short distance from its all-time low of 400 reached early March.

The forint has weakened further by more than 6.6% this year, significantly underperforming its peers.

A Budapest dealer said positioning against the forint was still negative, largely due to a dispute between Budapest and the EU over billions of euros in stimulus funds that Brussels has yet to release for Hungary, and a dispute over the oil embargo against Russia that Hungary blocked until the end.

“There is no concrete reason behind this latest bout of forint strength…markets look to Thursday’s central bank deposit tender,” he said, adding that liquidity was quite thin. “There is a long weekend coming up, there are such periods of corrections.”

DON’T LIKE THE POSITION

New PMI data from the region on Wednesday showed that manufacturing business sentiment eased in May as economies brace for a slowdown due to high inflation, rising energy costs and fallout from the war in Ukraine.

“The NBH meeting does not change our view on HUF and we keep it as a dislike,” Morgan Stanley said in a note.

“Absent an improvement in emerging market sentiment and/or a resolution of the rule of law issue (between HU and the EU), we remain an averse stance on the forint. currency risk premiums and positioning is short, but we believe it is warranted in the short term.”

National Bank of Hungary (NBH) Deputy Governor Barnabas Virag promised the bank would continue to raise rates “for the foreseeable future”, saying the battle against inflation would be prolonged.

The Polish zloty EURPLN= was 0.3% lower at 4.5945 and the Czech Koruna EURCZK= was down 0.1% at 24.74.

The European Commission is expected to approve on Wednesday Poland’s multibillion-euro plan to rebuild the economy after the COVID-19 pandemic, which has been stalled by a dispute over rule of law practices in Warsaw, officials said. EU officials said.

The main index of Budapest .BUX rose 2.64%, after a strong sell-off last week when Hungary announced windfall taxes on banks and a range of businesses as well as spending cuts. The main index of Prague .PX was also 0.8% higher. Warsaw shares fell half a percent.

CEE MARKETS

INSTANTANEOUS

At 12:29 p.m. CET

CURRENCIES

Last

Previous

Daily

To change

offer

close

change

in 2022

EURCZK=

Czech koruna

EURCZK=

24.7400

24.7130

-0.11%

+0.53%

EURHUF=

Hungarian forint

EURHUF=

395.5500

395.9500

+0.10%

-6.61%

EURPLN=

polish zloty

EURPLN=

4.5945

4.5805

-0.30%

-0.08%

EURRON=

lei in Romanian

EURRON=

4.9437

4.9420

-0.03%

+0.09%

EURHRK=

Croatian kuna

EURHRK=

7.5350

7.5425

+0.10%

-0.23%

EURRSD=

Serbian dinar

EURRSD=

117.3600

117.4500

+0.08%

+0.19%

Note: daily change

calculated from

1800 CET

Last

Previous

Daily

To change

close

change

in 2022

.PX

prague

.PX

1320.80

1309.8800

+0.83%

N / A

.BUX

Budapest

.BUX

40436.16

39397.41

+2.64%

-20.28%

.WIG20

Warsaw

.WIG20

1832.96

1842.93

-0.54%

-19.14%

.BETI

Bucharest

.BETI

12509.77

12509.77

+0.00%

-4.22%

.SBITOP

Ljubljana

.SBITOP

1154.08

1146.01

+0.70%

-8.08%

.CRBEX

Zagreb

.CRBEX

2076.49

2078.38

-0.09%

-0.14%

.BELEX15

Belgrade

.BELEX15

835.89

830.92

+0.60%

+1.84%

.SOFIX

Sofia

.SOFIX

623.81

617.97

+0.95%

-1.87%

Yield

Yield

Spread

Daily

(offer)

change

vs. Bunds

to change

Czech Republic

spread

CZ2YT=RR

2 years

CZ2YT=RR

5.5280

0.0430

+502bps

+3 basis points

CZ5YT=RR

5 years

CZ5YT=RR

4.9290

-0.0980

+410 basis points

-9bps

CZ10YT=RR

10 years

CZ10YT=RR

4.7130

-0.0190

+360bps

-1bps

Poland

PL2YT=RR

2 years

PL2YT=RR

6.8160

0.1060

+630 basis points

+10 basis points

PL5YT=RR

5 years

PL5YT=RR

6.9020

-0.0580

+607 basis points

-5bps

PL10YT=RR

10 years

PL10YT=RR

6.5390

-0.0860

+542bps

-8bps

FORWARD

3×6

6×9

9×12

3M interbank

Czech Republic

CZKFRAPRIBOUR=

6.82

6.75

6.55

6.19

Hungary

OYSTERBUBOR=

7.89

8.46

8.49

6.98

Poland

PLNFRAWIBOR=

7.59

7.77

7.74

6.59

Note: ENG Quotes

are for asking prices

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

(Reporting by Krisztina Than; Editing by Frank Jack Daniel and David Holmes)

((krisztina.than@thomsonreuters.com))

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