The market movers were initially
a rebound of the Polish zloty and recovery
on emerging equity markets, while a bearish
correction began just after a release of
results of the domestic bond auction. It
showed that both 5Y and 10Y government
bond papers found sufficient demand, but
respective bid-cover ratios very substantially
lower compared to the previous actions held
four weeks ago. Nevertheless despite the
higher volatility, the EUR/HUF pair did not
leave the 251 zone for the whole session.
It is worth noting that Hungary’s President
has announced dates for a general
parliamentary election. Hungarians will
vote on April 9 and April 23, which means
slightly earlier than it was previously
expected. In our view this news should have
a neutral or slightly positive impact on the
market, because the sooner a new
government will be in power the sooner the
market will get to know fiscal plans for next
four years.
Given the empty domestic eco calendar the
forint will look to other markets for
inspiration, where the Polish FX market and
European bond market should play a leading
role.
A potential threat for the forint represents
especially a bearish development in the
euro-zone bond market, which (if it lasts)
might put pressure on Hungary’s bonds and
might have an indirect impact on the
currency.
(CSOB - Investment research)