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CEE MARKETS-Forint halts losses as Hungary issues fx bonds, markets eye ECB

reuters.com · 06/09/2022 06:13
CEE MARKETS-Forint halts losses as Hungary issues fx bonds, markets eye ECB

By Anita Komuves

- The Hungarian forint held stable on Thursday, halting its steep losses from the previous session as the government said Hungary had successfully issued foreign currency benchmark bonds in international markets.

Hungary issued fx bonds in a total value of 3.8 billion dollars, Finance Minister Mihaly Varga said. nS8N2WO0HM

The foreign currency bond issuance has not yet affected Hungarian forint-denominated government bond yields, two fixed-income traders in Budapest said.

"Obviously, this was needed because the budget is out of balance and there is still no agreement on the EU pandemic recovery funds," one trader said. "If the issuance helps balance the budget, then this could calm nerves down and lower yields."

The yield on the 10-year government bond was about 10 basis points higher on Thursday at 7.42% as it was pressured by higher-than-expected May inflation data and fresh data on the budget deficit, traders said.

Hungary posted a 2.737 trillion forint ($7.42 billion) budget deficit in January-May, the finance ministry said. nS8N2VB013

The forint EURHUF= edged up 0.11% to trade at 394.90 per euro, after a more than 1.5% fall in the previous session due to a string of reasons.

These included worries about the lack of agreement over EU funds and a fresh row with Brussels as the bloc's industry chief told Hungary on Wednesday to suspend discriminatory fuel pricing against vehicles with foreign licence plates, traders and analysts said. nL1N2XV1OA

Higher-than-expected May inflation data also weakened the forint with added pressure from a central banker who said on Wednesday that the National Bank of Hungary will stick to a slower pace of rate rises adopted last month. nL1N2XV14D

Hungary's central bank kept its one-week deposit rate unchanged at 6.75% at a weekly tender on Thursday, as expected. nS8N2WO0HJ

Elsewhere, currencies were little moved ahead of a key meeting of the European Central Bank later in the day that investors eyed for clues on the bank's policy tightening plans.

The Czech crown EURCZK= edged down 0.02% and was trading at 24.689 per euro.

The Polish zloty EURPLN= firmed 0.09% to 4.5830 versus the common currency, a day after the central bank hiked its main interest rate by 75 basis points to 6.00% as it fights soaring inflation.

Investors were also looking ahead to a press conference by Central Bank Governor Adam Glapinski scheduled for 1300 GMT. nL8N2XT128





CEE MARKETS

SNAPSHOT

AT 1135 CET






CURRENCIES







Latest

Previous

Daily

Change




bid

close

change

in 2022

EURCZK=

Czech crown

EURCZK=

24.6890

24.6850

-0.02%

+0.74%

EURHUF=

Hungary forint

EURHUF=

394.9000

395.3500

+0.11%

-6.46%

EURPLN=

Polish zloty

EURPLN=

4.5830

4.5870

+0.09%

+0.17%

EURRON=

Romanian leu

EURRON=

4.9460

4.9440

-0.04%

+0.04%

EURHRK=

Croatian kuna

EURHRK=

7.5200

7.5225

+0.03%

-0.03%

EURRSD=

Serbian dinar

EURRSD=

117.4000

117.3900

-0.01%

+0.15%


Note: daily change

calculated from


1800 CET












Latest

Previous

Daily

Change





close

change

in 2022

.PX

Prague

.PX

1352.79

1345.0500

+0.58%

#VALUE!

.BUX

Budapest

.BUX

40445.33

40350.43

+0.24%

-20.26%

.WIG20

Warsaw

.WIG20

1800.65

1792.80

+0.44%

-20.57%

.BETI

Bucharest

.BETI

12474.71

12455.69

+0.15%

-4.49%

.SBITOP

Ljubljana

.SBITOP

1176.06

1167.01

+0.78%

-6.33%

.CRBEX

Zagreb

.CRBEX

2103.84

2098.47

+0.26%

+1.18%

.BELEX15

Belgrade

.BELEX15

830.56

830.79

-0.03%

+1.19%

.SOFIX

Sofia

.SOFIX

622.21

621.86

+0.06%

-2.12%











Yield

Yield

Spread

Daily




(bid)

change

vs Bund

change in


Czech Republic





spread

CZ2YT=RR

2-year

CZ2YT=RR

6.0250

0.0680

+533bps

+7bps

CZ5YT=RR

5-year

CZ5YT=RR

5.4050

0.0660

+432bps

+6bps

CZ10YT=RR

10-year

CZ10YT=RR

5.2880

0.0650

+393bps

+5bps


Poland






PL2YT=RR

2-year

PL2YT=RR

6.9410

0.0200

+624bps

+2bps

PL5YT=RR

5-year

PL5YT=RR

7.2310

0.1060

+615bps

+10bps

PL10YT=RR

10-year

PL10YT=RR

6.9350

0.1740

+557bps

+16bps



FORWARD








3x6

6x9

9x12

3M interbank


Czech Rep

CZKFRAPRIBOR=

7.17

7.16

7.10

6.32


Hungary

HUFFRABUBOR=

8.05

8.72

8.98

7.05


Poland

PLNFRAWIBOR=

7.79

7.93

7.91

6.74


Note: FRA quotes

are for ask prices





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




($1 = 368.7100 forints)


(Additional reporting by Jason Hovet in Prague and Pawel Florkiewicz in Warsaw; Editing by Subhranshu Sahu)

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

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