CEE MARKETS-Crown, forint off multi-week highs; demand up in Romanian bond auction
PRAGUE, Oct 15 (Reuters) - The Hungarian forint and Czech crown hovered around three-week highs as a slight rally by central Europe's currencies paused, with markets in risk-off mode as investors weighed prospects of a US interest rate hike.
In Romania, where a solution to a political crisis appeared with a new government likely to be installed, debt managers sold more October 2029 bonds than planned.
After trending lower in September, currencies have seen a small rebound in recent weeks, although an acceleration in US consumer prices in September has put another rate hike on the radar and helped the dollar
"Our bearish CEE FX view remains unchanged: a firmer US dollar and record-high gas prices will make it difficult for regional currencies to sustain gains," ING said in a note
"The (Polish zloty) looks particularly vulnerable given the (central bank's) dovish stance relative to market pricing"
The zloty was a touch stronger at 4.367 to the euro - the region's main reference currency - on Thursday
The Czech central bank is the only in the region to have raised interest rates this year, while Poland's policymakers have shown no rush to tighten with rising fuel costs pushing inflation up
Polish central banker Ireneusz Dabrowski said in an interview published on Wednesday that interest rates could remain unchanged until the beginning of next year, but the bank would not hesitate to raise them if data is unfavourable
Romania's political crisis - which has pressured the country's investment-grade credit rating - took a step toward resolution after the leftist Social Democrats said they would join the government of Prime Minister-designate Luca Niculescu
The country has been seeking to cut its high budget deficit
"On policies, we do not expect any meaningful reforms, but neither do we expect a deviation from the path agreed with the EU," JP Morgan said
Romania sold a more than planned 971.7 million lei ($204.13 million) worth of October 2029 bonds
The yield was up compared to an auction a month ago, but on markets, a 10-year benchmark bond was quoted with its yield down 13 basis points
In other trading, stock markets were mixed but little changed
The forint climbed 0.1% on the day to 363.50 per euro, off a high of 363.00 hit on Wednesday, and the crown also added 0.1%, reaching 24.355 to the euro; both have hit multi-week highs this week but remain well off peaks hit at the end of the summer months
CEE MARKETS SNAPSHOT AT 1305 CET | |||||
CURRENCIES | Latest trade | Previous close | Daily change | Change in 2026 | |
Czech crown | 24.3550 | 24.3770 | +0.09% | -0.77% | |
Hungary forint | 363.5000 | 364.0000 | +0.14% | +5.74% | |
Polish zloty | 4.3670 | 4.3720 | +0.11% | -3.47% | |
Romanian leu | 5.3346 | 5.3325 | -0.04% | -4.51% | |
Serbian dinar | 117.3000 | 117.4200 | +0.10% | +0.00% | |
Note: daily change calculated from 1800 CET | |||||
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STOCKS | Latest | Previous close | Daily change | Change in 2026 | |
Prague | .PX | 2622.97 | 2617.3300 | +0.22% | -2.33% |
Budapest | .BUX | 143876.84 | 143485.08 | +0.27% | +29.58% |
Warsaw | .WIG20 | 4180.91 | 4207.97 | -0.64% | +31.31% |
Bucharest | .BETI | 34385.33 | 33831.75 | +1.64% | +40.70% |
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BONDS | Yield (bid) | Yield change | Spread vs Bund | Daily change in spread | |
Czech Rep 2-year | 4.3235 | -0.0331 | +128bps | +3bps | |
Czech Rep 5-year | 4.6215 | -0.0819 | +147bps | +0bps | |
Czech Rep 10-year | 5.2502 | -0.0967 | +188bps | +0bps | |
Poland 2-year | 4.6680 | -0.3830 | +163bps | -32bps | |
Poland 5-year | 5.8550 | -0.1530 | +270bps | -7bps | |
Poland 10-year | 6.2640 | -0.1310 | +289bps | -4bps | |
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FORWARD RATE AGREEMENTS | 3x6 | 6x9 | 9x12 | 3M interbank | |
Czech Rep | , | 4.29 | 4.60 | 4.76 | 3.91 |
Poland | , | 4.22 | 4.61 | 4.78 | 3.90 |
Note: FRA quotes are for ask prices | |||||