Band Anita Komuves

BUDAPEST, July 4 (Reuters) – The Hungarian forint eased on Monday in low liquidity, underperforming its regional peers, as it came under pressure from a range of factors, including high inflation and a lack of agreement with the European Union on funds. RELAUNCH.

“There is little interest in the forint today as US markets will remain closed, so any trades may lead to larger moves in the rate…but the direction is pointing to weakening,” an FX trader in Budapest said.

Markets in the United States will remain closed during the Independence Day holiday.

the forint EURHUF= weakened 0.31% and traded at 401.40 to the euro, giving up some of its gains seen after the central bank’s sharp 185 basis point rate hike on Tuesday. Last Monday, the currency hit a historic low of 404.50 against the euro.

The forint has been the worst performer in Central Europe so far this year, losing more than 8% against the euro, under pressure from Hungary’s twin deficits, soaring inflation, taxes exceptional circumstances and a lack of agreement between the Hungarian government and Brussels on the release of EU funds.

“Despite achieving the largest tightening cycle in the region, Hungarian assets remained under pressure due to several political and geopolitical risks,” wrote Peter Virovacz, senior analyst at ING, in a note.

“But we continue to watch the headlines signaling a turnaround in the rule of law disputes over EU funds that are set to unlock the hidden potential of the forint in the second half of the year.”

Yields on long-term government bonds rose on Monday, under pressure from a weaker forint, a fixed-income trader said. The yield on the 10-year bond was around 7.95%.

The Czech crown EURCZK= edged up 0.04% to 24.745 as Governor Ales Michl said the Czech National Bank should keep interest rates high in order to achieve its main objective of reducing inflation.

Elsewhere, the Polish zloty EURPLN= was little moved as markets eyed Thursday’s central bank meeting where a Reuters poll of analysts expects the main interest rate to be hiked 75 basis points to 6.75%.

The Polish Stock Index .WIG20 lost 0.79%, underperforming the region as its banks index .BNKI fell about 3% after Poland’s ruling party leader Jaroslaw Kaczynski said on Saturday that banks should be taxed more if they don’t start offering savers better interest on their deposits.

CEE MARKETS

INSTANTANEOUS

At 10:45 a.m. CET

CURRENCIES

Last

Previous

Daily

To change

offer

close

change

in 2022

EURCZK=

Czech koruna

EURCZK=

24.7450

24.7560

+0.04%

+0.51%

EURHUF=

Hungarian forint

EURHUF=

401.4000

400.1500

-0.31%

-7.97%

EURPLN=

polish zloty

EURPLN=

4.6990

4.7005

+0.03%

-2.30%

EURRON=

lei in Romanian

EURRON=

4.9450

4.9458

+0.02%

+0.06%

EURHRK=

Croatian kuna

EURHRK=

7.5280

7.5325

+0.06%

-0.14%

EURRSD=

Serbian dinar

EURRSD=

117.3100

117.4000

+0.08%

+0.23%

Note: daily change

calculated from

1800 CET

Last

Previous

Daily

To change

close

change

in 2022

.PX

prague

.PX

1212.65

1217.9100

-0.43%

.BUX

Budapest

.BUX

39662.16

39331.33

+0.84%

-21.80%

.WIG20

Warsaw

.WIG20

1675.43

1688.85

-0.79%

-26.09%

.BETI

Bucharest

.BETI

12480.35

12375.32

+0.85%

-4.45%

.SBITOP

Ljubljana

.SBITOP

1125.66

1118.60

+0.63%

-10.34%

.CRBEX

Zagreb

.CRBEX

2009.19

2009.96

-0.04%

-3.37%

.BELEX15

Belgrade

.BELEX15

838.51

837.51

+0.12%

+2.16%

.SOFIX

Sofia

.SOFIX

611.79

609.99

+0.30%

-3.76%

Yield

Yield

Spread

Daily

(offer)

change

vs. Bunds

to change

Czech Republic

spread

CZ2YT=RR

2 years

CZ2YT=RR

6.0720

-0.2670

+550bps

-33bps

CZ5YT=RR

5 years

CZ5YT=RR

5.3010

0.0720

+433bps

+2 base points

CZ10YT=RR

10 years

CZ10YT=RR

4.6340

-0.0550

+336 basis points

-10bps

Poland

PL2YT=RR

2 years

PL2YT=RR

9.7500

2.1530

+918 bps

+209 basis points

PL5YT=RR

5 years

PL5YT=RR

7.1000

0.1450

+613 basis points

+10 basis points

PL10YT=RR

10 years

PL10YT=RR

6.6030

0.0680

+533 basis points

+2 base points

FORWARD

3×6

6×9

9×12

3M interbank

Czech Republic

CZKFRAPRIBOUR=

7.62

7.59

7.20

7.23

Hungary

OYSTERBUBOR=

10.29

10:65 a.m.

10.61

8.45

Poland

PLNFRAWIBOR=

7.94

8.03

7.88

7.05

Note: ENG Quotes

are for asking prices

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

(Additional reporting by Alan Charlish in Warsaw; Editing by Maju Samuel)

((komuves.anita@thomsonreuters.com)(+36 70 795 8815))

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