CEE MARKETS-Forint at record low as global gloom adds to local woes


By Alan Charlish and Anita Komuves

WARSAW, July 6 (Reuters)The Hungarian forint EURHUF= hit a fresh record low on Wednesday and the Polish zloty EURPLN= Also softened as worries about European Union funding added to global fears of recession.

Investors have been ditching risky assets amid worries about a sharp economic slowdown as energy prices surge, central banks hike interest rates and business sentiment sharps.

Meanwhile, markets have become more unsure about whether Poland will actually receive COVID-recovery funds from the European Union after criticism of reforms meant to unblock the cash in Brussels.

The forint was 0.52% weaker against the euro at 409.65 as of 0935 GMT, having hit a record low of 410.4 earlier in the session.

Gergely Suppan, senior analyst at Takarekbank, wrote in a note that both the worsening European outlook and concerns about the local economy were weighing on the currency.

“Soaring gas prices worsen the outlook for the budget deficit and the current account as well, and the weakening of the forint worsening the balance of the local economy.”

The zloty was 0.55% weaker at 4.7965, ahead of a rate-setting meeting on Thursday.

A Warsaw-based currency trader said that one factor putting pressure on the currency was that investors were uncertain about how much the central bank would raise rates on Thursday. Analysts polled by Reuters expect the main rate to rise to 6.75% from 6.00%.

Bank Millennium said in a note that worries over whether Warsaw would finally receive the EU COVID funds had returned the zloty to a close correlation with the forint, after the Polish currency got a boost from the approval of the country’s National Recovery Plan. Budapest still has not reached agreement with Brussels over the recovery funds.

The Romanian leu EURRON=tightly controlled by the central bank, was little changed at 4.9455 ahead of a rate-setting meeting at which it is expected to hike the cost of credit by 75 basis points to 4.50%.

Markets in Prague were closed for a holiday.

CEE MARKETS

SNAPSHOT

AT 1135 CET

CURRENCIES

Latest

Previous

Daily

Change

bid

close

change

in 2022

EURCZK=

Czech crown

EURCZK=

24.7700

24.7590

-0.04%

+0.41%

EURHUF=

Hungary forint

EURHUF=

409.6500

407.5000

-0.52%

-9.83%

EURPLN=

Polish zloty

EURPLN=

4.7965

4.7700

-0.55%

-4.28%

EURRON=

Romanian leu

EURRON=

4.9455

4.9449

-0.01%

+0.05%

EURHRK=

Croatian kuna

EURHRK=

7.5220

7.5225

+0.01%

-0.06%

EURRSD=

Serbian dinar

EURRSD=

117.2800

117.4000

+0.10%

+0.26%

Note: daily change

calculated from

1800 CET

Latest

Previous

Daily

Change

close

change

in 2022

.PX

Prague

.PX

1212.59

1212.5900

+0.00%

.BUX

Budapest

.BUX

39528.67

39256.26

+0.69%

-22.07%

.WIG20

Warsaw

.WIG20

1648.59

1644.46

+0.25%

-27.28%

.BETI

Bucharest

.BETI

12286.87

12209.92

+0.63%

-5.93%

.SBITOP

Ljubljana

.SBITOP

1119.75

1113.77

+0.54%

-10.81%

.CRBEX

Zagreb

.CRBEX

1981.87

1998.75

-0.84%

-4.69%

.BELEX15

Belgrade

.BELEX15

838.65

843.81

-0.61%

+2.18%

.SOFIX

Sofia

.SOFIX

611.32

610.10

+0.20%

-3.83%

Yield

Yield

Spread

Daily

(bid)

change

vs Bund

change in

Czech Republic

spread

CZ2YT=RR

2-year

CZ2YT=RR

6.2290

0.0000

+584bps

+4bps

CZ5YT=RR

5-year

CZ5YT=RR

5.3530

0.0090

+451bps

+3bps

CZ10YT=RR

10-year

CZ10YT=RR

4.7130

0.1380

+353bps

+14bps

Poland

PL2YT=RR

2-year

PL2YT=RR

7.7880

-0.1110

+740bps

-7bps

PL5YT=RR

5-year

PL5YT=RR

7.1430

-0.0470

+630bps

-3bps

PL10YT=RR

10-year

PL10YT=RR

6.6640

-0.0730

+548bps

-8bps

FORWARD

3×6

6×9

9×12

3M interbank

Czech Rep

CZKFRAPRIBOR=

7.51

7.42

6.80

7.23

Hungary

HUFFRABUBOR=

11.08

11.48

11.41

8.59

Poland

PLNFRAWIBOR=

8.03

8.12

8.02

7.10

Note: FRA quotes

are for ask prices

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

(Reporting by Alan Charlish in Warsaw and Anita Komuves in Budapest; Editing by Kim Coghill)

((alan.charlish@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.

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