Central European currencies cheered the Greek Parliament’s decision to accept more austerity measures despite mass protest took place on the streets of Athens. The forint was the winner of this morning’s opening with appreciating more than 1% to 291.50 from 294.50 late on Friday.
Inflation data are due in several countries this week and the Slovak inflation figure came in higher-than-expected at 3.9% Y/Y, while core inflation also inched higher to 2.6% Y/Y. Demand side inflationary pressures are likely will remain subdued due to the slowdown, but supply side price shocks from energy and food markets could remain a threat.
Hungarian bond markets followed the negative trend of the currency and yields rose back to 8.50%-8.60%, which could be attractive for long-term investors if the IMF agreement is seen likely. Last week, the EU Parliament criticised the government on media issues, which could mean that the Parliament may accept a decree against Hungary, but that may not have serious consequences for the negotiations.