Headlines
Currencies: Hungarian industry shows cautious signs of stabilization
Czech Republic
After a national holiday, the Czech koruna started the week on a positive note as the May foreign trade figures brought another significant surplus. The trade surplus reached CZK 11.7 bn in May and the Czech foreign trade has recorded a CZK 59bn surplus year-to-date. Unfortunately, these positive figures have been exclusively a result of lower commodity prices, while real exports (and imports) have been falling at a double digit pace (on year-on-year basis). This is why we expect this surplus release to be just a temporary boost for the koruna. In line with most other markets, CZK traders will focus on the start of the US earnings season and the subsequent stock market reaction. .stock market reaction.
| Currencies | Close | change |
| EUR/CZK | 25.93 | -0.2% |
| EUR/HUF | 274.4 | 0.0% |
| EUR/PLN | 4.380 | 0.0% |
| USD/PLN | 3.130 | 1.8% |
| EUR/USD | 1.393 | 0.0% |
| USD/JPY | 95.2 | -0.1% |
| Bonds 2Y | Close | change |
| Czech Rep | 2.95 | 0.33 |
| Hungary 3Y | 9.55 | 0.06 |
| Poland | 5.41 | -0.02 |
| Slovakia | 2.60 | -0.10 |
| Eurozone | 1.23 | 0.01 |
| USA | 0.95 | -0.01 |
| Bonds 10Y | Close | change |
| Czech Rep | 5.85 | 0.04 |
| Hungary | 9.55 | 0.10 |
| Poland | 6.29 | 0.04 |
| Slovakia | 5.28 | 0.08 |
| Eurozone | 3.32 | 0.00 |
| USA | 3.53 | 0.02 |
Hungary
The Hungarian forint had a quiet day as neither domestic nor foreign news brought any surprise to the market. The currency was traded within the range of 273.00 and 275.00 during the day. Since the 275.00 level was the resistance in previous months when the pair ranged between 275.00 and 290.00, it may become a support level of the new range.
Today, the May industrial output data was in line with expectations, showing a 22% Y/Y drop, which is somewhat better than the 25% Y/Y minus in April. The output level seems to have stabilized this year, but volatile monthly changes make difficult to see the turning point.
Poland
Investors took profit on the Polish zloty at the end of the week. Some players were probably closing long positions in the zloty as the sentiment on the global equity markets deteriorated. Nevertheless the losses of the Polish currency were only moderate and the pair did not returned above the EUR/PLN 4.40 mark.
The domestic data-calendar is again empty for the whole week. Although the bullish trend has run out of steam for a while, the zloty may remain quite resilient as it broke below key technical levels at 4.50 EUR/PLN last week. Hence, we only expect a further negative correction of the Polish currency unless a continuing sell-off on the global equity markets would occur.
