SPX3,639.63-15.41 -0.42%
DIA290.86-1.86 -0.64%
IXIC10,785.23-17.69 -0.16%

CEE MARKETS-Forint weakens, bond yields rise on concern over EU funds

CEE MARKETS-Forint weakens, bond yields rise on concern over EU funds

Reuters · 09/14/2022 05:34
CEE MARKETS-Forint weakens, bond yields rise on concern over EU funds

By Anita Komuves

- The Hungarian forint eased on Wednesday, underperforming peers, while long-term government bond yields jumped after media reported that the European Commission could propose that financial sanctions be imposed on Hungary.

The forint EURHUF= weakened 0.61% to 401.30 per euro after daily Nepszava reported late on Tuesday that the Commission could propose financial penalties against Hungary later this week for shortcomings on monitoring the possible misuse of European Union funds.

"The market is stabilising after the initial panic as investors realise that this is yet the final word on the EU funds... when we hear something definitive, that will decide the fate of the currency," an FX trader in Budapest said.

The forint, central Europe's worst performer so far this year, has been pressured by a lack of agreement over European Union funds as the government is in a long-running dispute with the Commission on rule of law issues.

Long-term government bond yields jumped about 30 basis points on Wednesday on the report about the possible financial penalties, two fixed-income traders said.

"Higher-than-expected U.S. inflation and a rise in core yields was already pressuring both yields and the forint yesterday, but the report on EU funds really turned the sentiment around," one trader said.

The yield on the 10-year bond was about 9.2%, climbing back a 10-year high it touched on Friday.

Data showed on Tuesday that U.S. consumer prices rose more than expected in August, giving the Fed ammunition to deliver a third 75-basis-point interest rate hike Wednesday, which put pressure on European shares and emerging currencies. L1N30J1H4L4N30L1GL

The Czech crown EURCZK= was flat while the Romanian leu EURRON= eased 0.11% to 4.9245 per euro. The Polish zloty EURPLN= added 0.11% to 4.7200 per euro.

Most central European shares weakened, tracking European peers, with Budapest .BUX leading losses as it was down 1.06%. Prague .PX slid 0.35% and Bucharest .BETI was 0.37% lower. Warsaw .WIG20 bucked the trend and added 0.61%.




CEE MARKETS

SNAPSHOT

AT 1111 CET






CURRENCIES







Latest

Previous

Daily

Change




bid

close

change

in 2022

EURCZK=

Czech crown

EURCZK=

24.5350

24.5350

+0.00%

+1.37%

EURHUF=

Hungary forint

EURHUF=

401.3000

398.8500

-0.61%

-7.95%

EURPLN=

Polish zloty

EURPLN=

4.7200

4.7250

+0.11%

-2.73%

EURRON=

Romanian leu

EURRON=

4.9245

4.9190

-0.11%

+0.48%

EURHRK=

Croatian kuna

EURHRK=

7.5165

7.5234

+0.09%

+0.01%

EURRSD=

Serbian dinar

EURRSD=

117.2600

117.3200

+0.05%

+0.27%


Note: daily change

calculated from


1800 CET












Latest

Previous

Daily

Change





close

change

in 2022

.PX

Prague

.PX

1236.74

1241.1100

-0.35%


.BUX

Budapest

.BUX

41135.34

41575.55

-1.06%

-18.90%

.WIG20

Warsaw

.WIG20

1528.64

1519.35

+0.61%

-32.57%

.BETI

Bucharest

.BETI

11880.32

11924.88

-0.37%

-9.04%

.SBITOP

Ljubljana

.SBITOP

1081.16

1086.51

-0.49%

-13.88%

.CRBEX

Zagreb

.CRBEX

1991.84

1992.20

-0.02%

-4.21%

.BELEX15

Belgrade

.BELEX15

835.14

847.71

-1.48%

+1.75%

.SOFIX

Sofia

.SOFIX

611.19

613.73

-0.41%

-3.85%











Yield

Yield

Spread

Daily




(bid)

change

vs Bund

change in


Czech Republic





spread

CZ2YT=RR

2-year

CZ2YT=RR

5.8380

-0.2230

+445bps

-23bps

CZ5YT=RR

5-year

CZ5YT=RR

4.8290

-0.1340

+324bps

-14bps

CZ10YT=RR

10-year

CZ10YT=RR

4.5010

-0.0490

+278bps

-5bps


Poland






PL2YT=RR

2-year

PL2YT=RR

6.4320

0.0890

+504bps

+8bps

PL5YT=RR

5-year

PL5YT=RR

6.3020

0.0460

+472bps

+4bps

PL10YT=RR

10-year

PL10YT=RR

5.9070

0.0540

+418bps

+5bps



FORWARD








3x6

6x9

9x12

3M interbank


Czech Rep

CZKFRAPRIBOR=

7.22

7.08

6.68

7.25


Hungary

HUFFRABUBOR=

14.03

14.24

13.90

12.87


Poland

PLNFRAWIBOR=

7.43

7.46

7.33

7.15


Note: FRA quotes

are for ask prices





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




(Additional reporting by Pawel Florkiewicz in Warsaw; Editing by Kim Coghill)

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

For related  and prices, click on the codes in brackets:
All emerging market EMRG CEEU CEE/
Spot FX rates
Eastern Europe spot FX EEFX= Middle East spot FX MEFX=
Asia spot FX ASIAFX= Latin America spot FX LATAMFX=
Other and reports
World central bank CEN Economic Data Guide ECONGUIDE
Official rates GLOBAL/INT Emerging Diary EMRG/DIARY
Top events M/DIARY Diaries DIARY Diaries Index IND/DIARY