CEE MARKETS-Forint gains on budget optimism, central bank decision in focus

By Reuters News

- The Hungarian forint gained on Tuesday after the government presented a deficit-cutting 2027 budget and as investors awaited a central bank interest rate decision later in the day.

  • The forint strengthened after Prime Minister Peter Magyar's government on Monday unveiled its 2027 budget, targeting a budget deficit of 4.9% of gross domestic product. It gained 0.2% to 362.70 per euro by 0729 GMT.

  • Magyar said on Tuesday the government expected the deficit to narrow further to 2.8% of economic output by 2030, below the European Union's 3% ceiling.

  • "We maintain our previous view that the (HUF) trade is currently too crowded, and we would not be surprised by a more significant correction, given how strongly Hungarian bonds rallied ahead of the budget plan's release," ING said in a note.

  • "On the other hand, we remain bullish on the overall story, and we expect that, sooner or later, the market will begin to fade the higher yields."

  • Hungarian investors were also awaiting a central bank rate decision due later on Tuesday. The National Bank of Hungary is widely expected to leave its base rate unchanged at 5.5% .

  • Elsewhere, the Polish zloty was little changed at 4.3720 per euro.

  • "Recent comments from members of the Monetary Policy Council (MPC) align with the slightly hawkish tone from the October meeting, which, in our view, reduces the risk of a depreciation of the Polish zloty," Bank Millennium analysts said.

  • "The EUR/PLN exchange rate remains stable this morning, hovering around the 4.37 level. Today's data releases from the domestic economy are unlikely to have a significant impact on market pricing."

  • Data published on Tuesday showed Polish industrial output rose 4.6% year-on-year in September, above analysts' expectations, and wages grew by 5.8% while analysts expected 6.1%.

  • Bourses in the region mostly fell in line with global markets, with Warsaw .WIG20 leading losses with a drop of 0.6%.

CEE MARKETS SNAPSHOT AT 0929 CET




CURRENCIES


Latest trade

Previous close

Daily change

Change in 2026

Czech crown

24.3250

24.3360

+0.05%

-0.65%

Hungary forint

362.7000

363.3000

+0.17%

+5.97%

Polish zloty

4.3720

4.3725

+0.01%

-3.58%

Romanian leu

5.3242

5.3235

-0.01%

-4.32%

Serbian dinar

117.3300

117.4300

+0.09%

-0.03%

Note: daily change calculated from 1800 CET






STOCKS


Latest

Previous close

Daily change

Change in 2026

Prague

.PX

2636.30

2641.5600

-0.20%

-1.84%

Budapest

.BUX

143818.98

143839.26

-0.01%

+29.53%

Warsaw

.WIG20

4190.08

4213.90

-0.57%

+31.60%

Bucharest

.BETI

35298.58

35107.93

+0.54%

+44.44%



BONDS

Yield (bid)

Yield change

Spread vs Bund

Daily change in spread

Czech Rep 2-year

4.3343

-0.0013

+125bps

+0bps

Czech Rep 5-year

4.7386

0.0042

+152bps

+1bps

Czech Rep 10-year

5.3362

0.0402

+190bps

+5bps







Poland 2-year

4.7610

-0.3020

+167bps

-30bps

Poland 5-year

5.9790

-0.0480

+276bps

-4bps

Poland 10-year

6.3620

-0.0190

+292bps

-1bps

FORWARD RATE AGREEMENTS


3x6

6x9

9x12

3M interbank

Czech Rep

,

4.31

4.68

4.84

3.92

Poland

,

4.32

4.71

4.88

3.89

Note: FRA quotes are for ask prices





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