CEE MARKETS – Hungarian Forint Recovers Slightly, PMI Data Indicates Slowdown
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.