Hungary's forint fell 2% on Monday, leading losses among
Central European currencies, while stocks across the region
plunged as the collapse of startup-focused Silicon Valley Bank
battered global markets, with Hungary's OTP shares losing 6.6%.
At the same time, government bond yields in central Europe
followed core markets lower as investors sought safer assets
while assessing the possible fallout from the SVB collapse amid
bets on less aggressive tightening from the U.S. Federal
Reserve.
"It is all driven by core markets, newsflows from SVB
and others," a Prague-based fixed income trader said.
Czech 10-year bond yields were bid at a one-month low, down 17 basis points, while interest rate swaps fell over 20 bps. The benchmark Polish 10-year yield also dropped 17 bps to 5.936%. Hungary's 10-year bond yield was down 24 bps at 8.46%, according to the debt agency's fixing page .
Stock markets were under the most pressure, with Prague down 2.7%, falling for a third consecutive day, dragged lower by banking stocks.
Budapest hit its lowest since November, down 2.8%, and Warsaw's blue-chip index fell to a three-month low. U.S. authorities launched emergency measures on Sunday to shore up confidence in the banking system after the failure of Silicon Valley Bank.
The Czech National Bank said it was monitoring the situation but added there was no bank with a similar business model in the Czech banking sector. Market turmoil led investors to speculate the U.S. Federal Reserve will no longer raise interest rates by a super-sized 50 bps this month, hitting the dollar. Despite the weaker dollar, the forint eased about 1.93% to 390.30 versus the euro by 1246 GMT, and then extended losses to around 393.25 before regaining some ground. The forint underperformed the region's currencies on Monday. The Czech crown dropped 0.5%. In Poland, the zloty was also weaker by 0.4% at 4.6945 to the euro. In Hungary, investors were also eyeing any fallout from a policy dispute between the central bank and the government over tackling inflation that erupted last week.
Prime Minister Viktor Orban said on Thursday the National Bank of Hungary's cuts to money supply were too drastic as inflation had probably peaked and price growth was driven by energy costs and sanctions on Russia. The comments came after sharp criticism by the central bank chief of the government's economic policy. On Monday, the Hungarian central bank declined to comment on whether NBH Governor Gyorgy Matolcsy had met with Orban, or whether any meeting was in the pipeline. CEE SNAPSHO AT
MARKETS T 1346
CET
CURRENC
IES
Latest Previou Daily Change s
bid close change in 2023
EURCZK Czech <EURCZK 23.7300 23.6140 -0.49% +1.80%
= crown =>
EURHUF Hungary <EURHUF 390.300 382.750 -1.93% +2.34%
= forint => 0 0
EURPLN Polish <EURPLN 4.6945 4.6760 -0.39% -0.11%
= zloty =>
EURRON Romanian <EURRON 4.9161 4.9135 -0.05% +0.54%
= leu =>
EURHRK Croatian <EURHRK 7.5330 7.5365 +0.05% +0.05%
= kuna =>
EURRSD Serbian <EURRSD 117.200 117.330 +0.11% +0.09%
= dinar => 0 0
Note: calculated from 1800
daily CET
change
Latest Previou Daily Change s
close change in 2023
.PX Prague 1339.36 1376.23 -2.68% +11.45
00 %
.BUX Budapest 41858.3 43077.6 -2.83% -4.42%
9 9
.WIG20 Warsaw <.WIG20 1737.64 1799.58 -3.44% -3.03%
>
.BETI Buchares 12241.1 12354.7 -0.92% +4.95%
t 5 6
.SBITO Ljubljan <.SBITO 1186.00 1194.66 -0.72% +13.08
P a P> %
.BELEX Belgrade <.BELEX 893.27 894.40 -0.13% +8.33%
15 15>
.SOFIX Sofia <.SOFIX 619.81 632.75 -2.05% +3.05%
>
Yield Yield Spread Daily
(bid) change vs Bund change
in
Czech spread
Republic
CZ2YT= 2-year <CZ2YT= 5.8290 0.0450 +329bp +57bps
RR RR> s
CZ5YT= 5-year <CZ5YT= 5.0360 -0.1200 +280bp +27bps
RR RR> s
CZ10YT <CZ10YT 4.6500 -0.1740 +246bp +14bps
=RR 10-year =RR> s
Poland
PL2YT= 2-year <PL2YT= 5.9080 -0.2690 +337bp +26bps
RR RR> s
PL5YT= 5-year <PL5YT= 5.9220 -0.1950 +369bp +20bps
RR RR> s
PL10YT <PL10YT 5.9270 -0.1970 +374bp +11bps
=RR 10-year =RR> s
FORWARD
3x6 6x9 9x12 3M interba nk Czech <CZKFRA 7.17 6.87 6.26 7.20 Rep ><PRIBO
R=>
Hungary <HUFFRA 14.91 13.27 12.07 16.29 ><BUBOR
=>
Poland <PLNFRA 6.81 6.57 6.11 6.93 ><WIBOR
=>
Note: are for ask
FRA prices
quotes
********************************************
******************
(Reporting by Krisztina Than in Budapest, Jason Hovet in Prague
and Alan Charlish in Warsaw; Editing by Krishna Chandra Eluri
and Nick Macfie)
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