Tuesday, October 4

Forint gains, other FX stable as markets eye EU meeting on gas prices


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BUDAPEST — The Hungarian forint firmed to

a more than three-week high on Friday while its CEE peers were

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little moved as investors eyed a meeting of European energy

ministers later in the day where a cap on Russian gas prices

could be discussed.

The forint was up 0.47% on the day and trading at

395.35 per euro as it was supported by hopes for a deal on EU

funds after the government announced on Monday that it would

create an anti-corruption body.

It was also supported by a drop in gas prices in the past

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week, which eases the burden on import-dependent Hungary’s

current account balance and budget, traders and analysts said.

“The forint could keep gaining in today’s quiet trade. I do

not expect much activity from London now, a day after the Queen

died,” an FX trader in Budapest said. “Investors are also

waiting for the result of the EU meeting on Russian gas prices.”

Economists at Erste Investment said Hungary’s plan to curb

gas consumption by a fourth from the start of the heating season

at public institutions could curb the deficit of the budget and

the trade account by some 400 million euros.

EU energy ministers on Friday are set to discuss ways to

tame energy prices, which have surged as Russia has halted most

gas flows to Europe in response to European sanctions after

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Russia sent tens of thousands of troops into Ukraine.

The Czech Republic said on Wednesday that it wants to remove

capping Russian gas prices from the agenda of the meeting.

Hungarian Foreign Minister Peter Szijjarto said a price cap

goes against European and Hungarian interests.

Lower gas prices, “which has become the main driver of the

region these days” support all CEE currencies that are now

trading at their strongest since mid-August, ING wrote in a

note.

“Purely based on this relationship, we could see further

appreciation, … In addition, today’s EU meeting could bring a

further drop in gas prices and additional support for the CEE.”

The Polish zloty was unmoved a day after central

bank Governor Adam Glapinski said the bank could hold rates

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unchanged next month or opt for a small increase amid concerns

that high borrowing costs could weigh too much on the economy.

“No surprise in yesterday’s event, which … resulted in

another day of stabilization of the zloty against the euro,”

Bank Millennium wrote.

Stocks in the region firmed, with Warsaw leading

gains as it added 3.25%.

CEE SNAPSH AT

MARKETS OT 1032

CET

CURREN

CIES

Latest Previo Daily Change

us

bid close change in

2022

EURCZK Czech 0 0 %

EURHUF Hungary 00 00 %

EURPLN Polish %

EURRON Romania %

EURHRK Croatia %

EURRSD Serbian 00 00 % %

Note: calculated from 1800

daily CET

change

Latest Previo Daily Change

us

close change in

2022

.PX Prague 1196.6 1172.2 +2.08

1 200 %

.BUX Budapes 41294. 40863. +1.05 -18.58

t 96 94 % %

.WIG20 Warsaw <.wig20> 1 8 % %

.BETI Buchare 11974. 11894. +0.67 -8.32%

st 19 18 %

.SBITO Ljublja <.sbito p na> 1 4 % %

.CRBEX Zagreb <.crbex> 8 3

.BELEX Belgrad <.belex e> %

.SOFIX Sofia <.sofix> %

Yield Yield Spread Daily

(bid) change vs change

Bund in

Czech spread

Republi

c

CZ2YT= ps

CZ5YT= ps s

CZ10YT ps

Poland

PL2YT= ps

PL5YT= ps

PL10YT ps

FORWARD

3×6 6×9 9×12 3M

interb

ank

Czech

Hungary

Poland

Note: are for ask

FRA prices

quotes

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

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

(Additional reporting by Pawel Florkiewicz in Warsaw; Editing

by Muralikumar Anantharaman)

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