Forint hits historic low on gas leak worries, end of rate hike cycle



(Updates with forint and Hungary bond yield moves, trader comments, Czech cenbank decision)

By Anita Komuves

BUDAPEST, Sept 29 (Reuters) - The forint plunged to a record low on Thursday, underperforming regional peers as the Hungarian central bank's announcement on Tuesday that it was ending its rate hike cycle added pressure to concerns over the Nord Stream gas leaks.

The forint EURHUF= was down 1.69% on the day and trading at 420.60 per euro after hitting a historic low of 425 earlier in the session.

"The timing of the central bank's announcement was very unfortunate in this uncertain global market environment. That is why international investors could be punishing the forint," an FX trader in Budapest said.

The National Bank of Hungary said on Tuesday that it was ending its year-long rate hike cycle amid a slowing economy and that it will focus on liquidity tightening.

Hungarian long-term government bond yields rose about 20 basis points on Thursday as the forint fell, a fixed-income trader said.

The yield on the benchmark 10-year bond was about 9.80%, which is a fresh 10-year high according to Refinitiv data.

Central Europe's currencies have been hit hard this week as gas leaks on the Nord Stream pipelines worried investors and led to a rise in gas prices.

The strength of the dollar and global recession fears were also pressuring CEE currencies while liquidity was very low, traders in Warsaw and Budapest said.

The Polish zloty EURPLN= fell 1.06% to 4.8645 versus the common currency.

The Czech crown EURCZK= was 0.2% lower, trading at 24.697 per euro after the central bank kept interest rates unchanged at 7%, as expected, as inflation unexpectedly slowed in August.

The Czech central bank has intervened in markets since May to prevent any excessive weakening.

"While a sharp rise in inflation and/or significant pressure on the currency could force the CNB to deliver another hike, our forecast envisages that interest rates will be left on hold and that policymakers will transition to rate cuts in the middle of next year," Capital Economics wrote.

CEE

SNAPSH AT

MARKETS OT

1524

CET

CURREN

CIES

Latest Previo Daily Change

us

bid

close change in

2022 EURCZK Czech

<EURCZK 24.697 24.647 -0.20% +0.71 =

crown

=>

0

0

% EURHUF Hungary <EURHUF 420.60 413.50 -1.69% -12.18 =

forint =>

00

00

% EURPLN Polish <EURPLN 4.8645 4.8130 -1.06% -5.62% =

zloty

=>

EURRON Romania <EURRON 4.9485 4.9464 -0.04% -0.01% =

n leu

=>

EURHRK Croatia <EURHRK 7.5270 7.5295 +0.03 -0.13% =

n kuna =>

% EURRSD Serbian <EURRSD 117.24 117.32 +0.07 +0.29 =

dinar

=>

00

50

%

%

Note:

calculated from

1800

daily

CET

change

Latest Previo Daily Change

us

close change in

2022 .PX

Prague

.PX

1120.0 1144.9 -2.17%

7

200

.BUX

Budapes .BUX

37455. 37731. -0.73% -26.15

t

63

27

% .WIG20 Warsaw <.WIG20 1396.2 1435.3 -2.73% -38.41

>

4

7

% .BETI Buchare .BETI 10729. 10669. +0.56 -17.85

st

44

33

%

% .SBITO Ljublja <.SBITO 956.54 966.33 -1.01% -23.81 P

na

P>

% .CRBEX Zagreb <.CRBEX 1900.7 1915.8 -0.79% -8.59%

>

0

2

.BELEX Belgrad <.BELEX 827.24 823.55 +0.45 +0.79 15

e

15>

%

% .SOFIX Sofia

<.SOFIX 584.59 590.37 -0.98% -8.04%

>

Yield Yield Spread Daily

(bid) change vs

change

Bund

in

Czech

spread

Republi

c

CZ2YT=

<CZ2YT= 6.0560 -0.038 +419b -5bps RR

2-year RR>

0

ps CZ5YT=

<CZ5YT= 5.5490 0.1040 +344b +5bps RR

5-year RR>

ps CZ10YT

<CZ10YT 5.5620 0.3530 +332b +25bp =RR

10-year =RR>

ps

s

Poland

PL2YT=

<PL2YT= 7.3340 0.2120 +547b +20bp RR

2-year RR>

ps

s PL5YT=

<PL5YT= 7.5570 0.2730 +545b +22bp RR

5-year RR>

ps

s PL10YT

<PL10YT 7.3220 0.2790 +508b +18bp =RR

10-year =RR>

ps

s

FORWARD

3x6

6x9

9x12

3M

interb

ank

Czech

<CZKFRA

7.30

7.26

6.96

7.24

Rep

><PRIBO

R=>

Hungary <HUFFRA 14.03 13.93 13.74 13.26

><BUBOR

=>

Poland <PLNFRA

7.58

7.65

7.58

7.17

><WIBOR

=>

Note:

are for ask

FRA

prices

quotes

****************************************

**********************


Additional reporting by Jason Hovet in Prague and Pawel Florkiewicz and Anna Wlodarczak-Semczuk in Warsaw, Editing by Angus MacSwan

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