Headlines
Currencies: EUR/HUF just above the 260 level
Hungary: Polish MPC members mull possibilities for rate hikes this year
Czech Republic
The Czech koruna took advantage of a wave of optimism for riskier assets and strengthened against the euro to five-month high. In the absence of strong domestic stimulus the currency pair EUR/CZK found even strength to cross temporarily 25.38 mark, however later on a subsequent correction returned it to 25.40.
The only domestic event was the auction of the 3.40%/2015 government bond, which after several successful auctions held earlier this year, had only an average reception. With the supply of CZK 7 bn the demand reached CZK 8,659 bn. In the end, the Ministry of Finance sold bonds for CZK 6.509 bn, with average yield of 3.287%.
No fresh statistics are released today. Nevertheless, it seems that previous day’s optimism on global markets slowly vanishes as risk aversion increased after a Greek official said the country might go to the IMF for support. It may influence also the pair EUR/CZK and the koruna could loose a part of its gains.
| Currencies | change | |
| EUR/CZK | 25.41 | -0.2% |
| EUR/HUF | 261.9 | -0.4% |
| EUR/PLN | 3.873 | 0.1% |
| USD/PLN | 2.817 | 0.0% |
| EUR/USD | 1.367 | -0.9% |
| USD/JPY | 90.2 | -0.5% |
| Bonds 2Y | change | |
| Czech Rep. | 1.31 | -0.01 |
| Hungary 3Y | 6.39 | -0.06 |
| Poland | 4.70 | -0.06 |
| Slovakia | 2.03 | -0.03 |
| Eurozone | 0.86 | -0.04 |
| USA | 0.91 | -0.01 |
| Bonds 10Y | change | |
| Czech Rep. | 4.18 | 0.00 |
| Hungary | 7.40 | -0.07 |
| Poland | 5.55 | -0.09 |
| Slovakia | 4.10 | 0.05 |
| Eurozone | 3.11 | -0.03 |
| USA | 3.63 | -0.03 |
Hungary
On Wednesday the forint continued its rally and the currency pair EUR/HUF closed at 261.20, i.e. the level not seen since December 2008. After confirmation of a high industrial production growth in January, the forint used the positive mood to risky assets and on the Central European region.
Vanishing optimistic mood on global markets with absence of important domestic events could finally stop the forint’s rally. Also the published minutes of the last National Bank meeting showed that already six central bankers voted to reduce rates at the last meeting in February. Hence, chance for another cut later this month might be higher than expected and that may also contribute to a forint weakening today.
Poland
The Polish zloty traded sideways during last 24 hours as a mixed bag of economic data and comments from domestic central bankers were unable to give trading a strong direction. Concerning the eco data, the PPI surprisingly declined in February, which reminds us that the currency’s appreciation could already be visible in (producer) prices. Regarding the February industrial production data, they matched expectations of strong growth of more than 3% on a monthly basis.
The recent comments from the NBP indicated that the consensus about future upward direction of official rates has been building, even though the zloty is strong. Both the governor Skryzpek and Anna Zielinska-Glebocka have called for a possibility to initiate a tightening cycle in today’s press. We think that these comments again support our long-term bullish view on the zloty.
