Hungary's forint, bond yields find support after EU funds announcement
(Updates with announcement on EU funds, market reaction, trader comment)
By Anita Komuves and Alan Charlish
BUDAPEST/WARSAW, Nov 30 (Reuters) - The Hungarian forint steadied on Wednesday after the European Commission approved Hungary's post-pandemic recovery plan but said that it will hold back any payouts until Budapest fulfils all agreed conditions.
The EU's executive also asked European Union governments to freeze 7.5 billion euros that Hungary would normally be getting from the bloc's budget.
The forint strengthened after the announcement but gave up gains to trade down 0.1% on the day by 1226 GMT at 408.55 per euro, off session lows.
"The currency could strengthen significantly once EU governments give a final nod to Hungary's recovery plan," an FX trader in Budapest said.
"Despite the freezing of funds, the overall message is positive as it ends the uncertainty, and it was the uncertainty that really weakened the forint."
The forint is central Europe's worst-performing currency in 2022, down 9.5%.
On Tuesday, Hungary's minister in the negotiations, Tibor Navracsics, said the government expected its recovery fund plan to be approved by EU finance ministers on Dec. 12.
Long-term government bond yields edged up after the Commission's message, with the yield on the 10-year benchmark bond around 8.12%, a trader said.
"This announcement was in line with previous news reports, and it is actually good news as it means that Hungary will get funds sooner or later. That is why neither the forint, nor bond yields reacted wildly," the trader said.
Investors also eyed the central bank's two-month deposit tender with results due later in the day. The tender is offered at a floating rate equalling the base rate, which stands at 13%.
The central bank also offers a quick one-day deposit facility at 18% on a daily basis.
In Poland, the zloty EURPLN= was 0.4% firmer at 4.665 after inflation for November came in at 17.4%, below forecasts.
"I don't think this is going to have a major impact, this would be a different thing if we had expectations of rate-hikes, but we don't," said Piotr Poplawski, senior economist at ING in Warsaw.
The Czech crown EURCZK= was flat at 24.365.
CEE
SNAPSH AT
MARKET OT
1326
S
CET
CURREN
CIES
Latest Previo Daily Change
us
bid
close change in
2022 EURCZK Czech
<EURCZ 24.365 24.357 -0.03% +2.08 =
crown
K=>
0
0
% EURHUF Hungary <EURHU 408.35 408.00 -0.09% -9.54% =
forint F=>
00
00
EURPLN Polish <EURPL 4.6645 4.6845 +0.43 -1.58% =
zloty
N=>
% EURRON Romania <EURRO 4.9250 4.9170 -0.16% +0.47 =
n leu
N=>
% EURHRK Croatia <EURHR 7.5485 7.5495 +0.01 -0.41% =
n kuna K=>
% EURRSD Serbian <EURRS 117.20 117.33 +0.12 +0.32 =
dinar
D=>
00
50
%
%
Note:
calculated
1800
daily
from
CET
change
Latest Previo Daily Change
us
close change in
2022 .PX
Prague
.PX
1213.2 1217.7 -0.37%
6
500
.BUX
Budapes .BUX 46014. 45780. +0.51 -9.28%
t
23
62
% .WIG20 Warsaw <.WIG2 1750.4 1736.1 +0.82 -22.78
0>
6
9
%
% .BETI Buchare <.BETI 11730. 11730. +0.00 -10.19
st
>
66
66
%
% .SBITO Ljublja <.SBIT 1066.6 1069.9 -0.31% -15.04 P
na
OP>
5
2
% .CRBEX Zagreb <.CRBE 1900.2 1902.6 -0.13% -8.61%
X>
6
8
.BELEX Belgrad <.BELE 814.23 814.97 -0.09% -0.80% 15
e
X15>
.SOFIX Sofia
<.SOFI 600.46 598.64 +0.30 -5.54%
X>
%
Yield Yield Spread Daily
(bid) change vs
change
Bund
in
Czech
spread
Republi
c
CZ2YT=
<CZ2YT 5.6000 -0.317 +348b -35bps RR
2-year =RR>
0
ps CZ5YT=
<CZ5YT 4.9930 -0.052 +305b -8bps RR
5-year =RR>
0
ps CZ10YT
<CZ10Y 4.7510 -0.049 +282b -7bps =RR
10-year T=RR>
0
ps
Poland
PL2YT=
<PL2YT 6.9620 -0.115 +484b -14bps RR
2-year =RR>
0
ps PL5YT=
<PL5YT 6.8760 -0.125 +494b -15bps RR
5-year =RR>
0
ps PL10YT
<PL10Y 6.6250 -0.113 +469b -13bps =RR
10-year T=RR>
0
ps
FORWAR
D
3x6
6x9
9x12
3M
interb
ank
Czech
<CZKFR
7.05
6.68
6.24
7.25
Rep
A><PRI
BOR=>
Hungary <HUFFR 13.70 12.37 11.62 15.30
A><BUB
OR=>
Poland <PLNFR
7.16
7.08
6.74
7.31
A><WIB
OR=>
Note:
are for ask
FRA
prices
quotes
***************************************
***********************
Reporting by Alan Charlish in Warsaw and Anita Komuves in Budapest; Editing by Sherry Jacob-Phillips and Maju Samuel
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