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Views Article – Sharenet Wealth

Europe, Forex

Currencies firm slightly, Hungarian yields edge lower

By Krisztina Than BUDAPEST, July 16 (Reuters) – Central European currencies traded slightly firmer while Hungarian government bond yields edged 2-3 basis points lower on Tuesday morning in quiet trading, tracking core market Bund and U.S. Treasury yields, traders said. Hungary will sell 3-month treasury bills at an auction at 0930 GMT where the average yield may actually dip into negative territory after last week the yield dropped to zero, traders said. Hungarian yields have edged lower since last week Hungarian inflation came in below analyst expectations, supporting the National Bank of Hungary’s dovish stance on monetary policy. “To put it simple, the NBH, which is committed to low interest rates, can now believe that they only have to get through this year, and then inflationary pressures will decline in any case parallel with a slowdown in the economy,” CIB Bank analysts said in a weekly note. A loose policy stance by the European Central Bank and the Fed also helps the Hungarian central bank to maintain its accomodative policy, they added. The Hungarian bank will hold its next rate meeting on July 23. The 3-year Hungarian bond yield was trading at 0.9%, the 5-year bond at 1.46%, while the 10-year yield was at around 2.41% in slow trading, a fixed income trader in Budapest said. These levels are 3-6 basis points below Monday’s benchmark fixings. “Today, we have no local factors. Bund and treasury yields have dropped 2-3 basis points and we are tracking that,” she said. At 0824 GMT, the Polish zloty was 0.08% firmer. So was the Hungarian forint, trading 0.11% firmer. The Czech crown also inched up. “There is no trend…it is just spread-trading as the crown has been moving in a very tight range lately between 25.580 and 25.610,” a dealer in Prague said. Investors are eyeing U.S retail sales data later in the day that could provide clues for future monetary policy in the United States. CEE SNAPSHO AT MARKETS T 1024 CET CURRENC IES Latest Previou Daily Change s bid close change in 2019 Czech <EURCZK 25.5850 25.6040 +0.07% +0.48% crown => Hungary <EURHUF 325.080 325.450 +0.11% -1.23% forint => 0 0 Polish <EURPLN 4.2577 4.2613 +0.08% +0.75% zloty => Romanian <EURRON 4.7330 4.7311 -0.04% -1.67% leu => Croatian <EURHRK 7.3920 7.3925 +0.01% +0.24% kuna => Serbian <EURRSD 117.600 117.720 +0.10% +0.60% dinar => 0 0 Note: calculated from 1800 daily CET change Latest Previou Daily Change s close change in 2019 Prague 1054.74 1056.65 -0.18% +6.91% 00 Budapest 40836.3 40725.4 +0.27% +4.34% 9 0 Warsaw <.WIG20 2322.85 2324.21 -0.06% +2.03% > Buchares 9166.94 9145.28 +0.24% +24.15% t Ljubljan <.SBITO 870.70 883.42 -1.44% +8.26% a P> Zagreb <.CRBEX 1890.57 1891.36 -0.04% +8.11% > Belgrade <.BELEX 759.53 759.37 +0.02% -0.28% 15> Sofia <.SOFIX 577.44 579.84 -0.41% -2.86% > BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT= 1.4450 -0.0030 +219bp +0bps RR> s 5-year <CZ5YT= 1.3650 0.0110 +200bp +2bps RR> s <CZ10YT 1.4480 -0.0230 +176bp -1bps 10-year =RR> s Poland 2-year <PL2YT= 1.5540 -0.0060 +229bp +0bps RR> s 5-year <PL5YT= 1.8840 -0.0940 +252bp -8bps RR> s <PL10YT 2.2670 -0.0080 +258bp +1bps 10-year =RR> s FORWARD RATE AGREEME NT 3×6 6×9 9×12 3M interbank Czech <CZKFRA 2.17 2.07 1.95 2.17 Rep ><PRIBO R=> Hungary <HUFFRA 0.30 0.37 0.45 0.25 ><BUBOR => Poland <PLNFRA 1.74 1.73 1.71 1.72 ><WIBOR => Note: are for ask FRA prices quotes ******************************************** ****************** (Reporting by Krisztina Than, additional reporting by Robert Muller; Editing by Angus MacSwan)


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