FX, stocks lifted by global risk-on mood



By Anita Komuves

BUDAPEST, June 21 (Reuters) - Central European currencies and stocks gained on Tuesday as the dollar eased and risk appetite returned to markets after last week's turmoil, when investors were concerned about aggressive interest rate hikes and risks of a global recession.

"CEE currencies strengthened today .... The firming moves coincided with a slightly weaker U.S. dollar and easing of the previous risk-off mood on global markets," Erste Group wrote in a client note.

Hungary's forint EURHUF= added 0.27% and was trading at 396.00 per euro, moving further away from a historic low of 403 that it reached last week.

"We see a bit of a correction and a return of risk appetite after last week's turmoil, but we will have to see whether this mood continues after markets in the U.S. open later today," an FX trader in Budapest said.

U.S. markets were closed on Monday for a holiday.

Hungary's central bank will hold an FX swap tender providing euro liquidity later in the day.

The bank announced in May that in June it would hold a total of four FX swap tenders providing euro liquidity and two short-term discount bill auctions, in order to strengthen the effectiveness of monetary transmission.

The Czech crown EURCZK= was flat ahead of a meeting of the Czech National Bank on Wednesday. Analysts polled by Reuters expect the meeting to result in a 100-basis-point or 125-basis-point rise in the key two-week repo rate, now at 5.75%.

This will be the last meeting of the bank before incoming governor Ales Michl takes over. Michl has consistently voted against rate hikes during the central bank's year-long tightening cycle, which has raised the main rate by a total of 550 basis points.

However, his promise of no more rate hikes will be tested right away by soaring inflation and a hawkish turn among major central banks.

Elsewhere, the Polish zloty EURPLN= added 0.22% and was trading at 4.6390 per euro.

"The zloty continues to strengthen, taking advantage of local factors, i.e. growing expectations for interest rate hikes in Poland ... and another set of probably good data from the domestic economy," Bank Millennium wrote.

Stocks in the region were also higher, tracking European peers, with Warsaw's index .WIG20 leading gains by adding 1.69%.

CEE

SNAPSH AT

MARKETS OT

1017

CET

CURREN

CIES

Latest Previou Daily

Change

s

bid

close

change

in 2022 Czech

<EURCZK 24.689 24.6900

+0.00%

+0.74% crown

=>

0

Hungary <EURHUF 396.00 397.050

+0.27%

-6.72% forint =>

00

0

Polish <EURPLN 4.6390 4.6510

+0.26%

-1.03% zloty

=>

Romania <EURRON 4.9475 4.9450

-0.05%

+0.01% n leu

=>

Croatia <EURHRK 7.5140 7.5165

+0.03%

+0.05% n kuna =>

Serbian <EURRSD 117.35 117.450

+0.09%

+0.20% dinar

=>

00

0

Note:

calculated from

1800 CET

daily

change

Latest Previou Daily

Change

s

close

change

in 2022 Prague

.PX

1323.6 1308.90

+1.12%

2

00

Budapes .BUX

40197. 39691.1

+1.28% -20.75% t

72

2

Warsaw <.WIG20 1708.2 1679.89

+1.69% -24.65%

>

0

Buchare .BETI 12406. 12325.8

+0.65%

-5.02% st

12

0

Ljublja <.SBITO 1143.6 1150.71

-0.61%

-8.90% na

P>

8

Zagreb <.CRBEX 1992.6 1993.82

-0.06%

-4.17%

>

8

Belgrad <.BELEX 834.40 836.00

-0.19%

+1.66% e

15>

Sofia

<.SOFIX 612.41 612.77

-0.06%

-3.66%

>

Yield Yield

Spread

Daily

(bid) change vs Bund change

in Czech

spread Republi

c

<CZ2YT= 6.6640 -0.1730 +553bps

-22bps 2-year RR>

<CZ5YT= 6.2340 -0.0230 +469bps

-10bps 5-year RR>

<CZ10YT 5.7680 0.0510 +400bps

-6bps 10-year =RR>

Poland

<PL2YT= 8.3900 0.0380 +725bps

-1bps 2-year RR>

<PL5YT= 8.5850 0.1340 +704bps

+6bps 5-year RR>

<PL10YT 8.1670 0.0230 +640bps

-8bps 10-year =RR>

FORWARD

3x6

6x9

9x12

3M

interban

k Czech

<CZKFRA

7.77

7.98

7.91

6.57 Rep

><PRIBO

R=>

Hungary <HUFFRA

9.50

10.09

10.19

7.63

><BUBOR

=>

Poland <PLNFRA

8.54

8.75

8.75

6.91

><WIBOR

=>

Note:

are for ask

FRA

prices

quotes

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

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


Reporting by Anita Komuves; Additional reporting by Alan Charlish in Warsaw; Editing by Bradley Perrett

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

We are using cookies to give you the best experience on our website. Read more or change your cookie settings.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.