CEE MARKETS – The Hungarian forint extends its losses in a thin market and underperforms the region
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.