Headlines
Currencies: Czech markets closed for holiday
Czech Republic
The Czech koruna experienced a weak session and lost against the Euro on Tuesday. As no domestic events were released the domestic currency together with other Central European pears was influenced by higher risk aversion and lost. CNB member Mr Holman’s comments that he prefers current rate stability at the central bank meeting next week had no impact on the market. Nevertheless, trading volumes were weak ahead of Wednesday’s holiday| Currences | change | |
| EUR/CZK | 26.21 | 0.7% |
| EUR/HUF | 270.5 | 1.0% |
| EUR/PLN | 4.215 | 0.4% |
| USD/PLN | 2.860 | 1.4% |
| EUR/USD | 1.483 | -0.5% |
| USD/JPY | 91.1 | -1.0% |
| Bonds 2Y | change | |
| Czech Rep. | 2.05 | 0.02 |
| Hungary 3Y | 7.22 | 0.22 |
| Poland | 5.06 | 0.06 |
| Slovakia | 1.61 | -0.02 |
| Eurozone | 1.32 | -0.06 |
| USA | 1.00 | -0.02 |
| Bonds 10Y | change | |
| Czech Rep. | 4.19 | -0.07 |
| Hungary | 7.42 | 0.09 |
| Poland | 6.18 | 0.04 |
| Slovakia | 4.35 | -0.16 |
| Eurozone | 3.27 | -0.10 |
| USA | 3.47 | -0.10 |
Hungary
The Hungarian forint continued its downward trend on Tuesday and after trading around 268.00 in the morning it lost more than 1% to 270.60 this morning. The pair has thus opened below the key 270.00 level today, which could be a bearish signal for the future.
The Hungarian fixed income market finally joined the bear market trend of the currency market with one day delay. Yields rose sharply about 20bps at the mid-part of the curve with 3- and 5-year yields climbing back to the key 7.00% level. The shorter and longer end of the curve saw yields rising a bit less about 10bps. Turnover was generally low as demand fell sharply amid the worsening sentiment as depth of the market seems to be fairly shallow.
Poland
On Wednesday, the sentiment remained negative for most of the session and the pair stayed above 4.21 EUR/PLN. The shaky performances of the global equity markets prevent the bulls from come back and the traded volume was once again quite low.
The Polish central bank should stay on hold and deliver more neutral comment suggesting that it slowly leaves easing bias. The data flow and comments continue to support our view of interest rate stability till the end of the year and slow tightening during the next one. The decision as well as the subsequent comments should not bring major surprises to the market.
