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Forint gains as government takes steps to unlock EU funds

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BUDAPEST — The Hungarian forint firmed on

Tuesday, outperforming its peers as it was lifted by hopes the

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European Union could unlock funds after the government said it

would create an independent anti-corruption authority.

The forint was up 0.32% on the day and trading at

403.35 per euro, recouping some losses from the previous session

when CEE currencies were pressured by rising gas prices.

Hungary will set up an anti-corruption authority to oversee

the spending of European Union funds, the government said late

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on Monday, in a bid to unlock funds frozen by the European

Commission over rule of law and other issues.

The forint’s firming reflects “the news that Hungarian Prime

Minister Orban signed a decree to establish an independent

anti-corruption agency aimed at safeguarding EU money,” Erste

Group wrote in a note.

We “believe that the EU money theme should return to the

headlines in mid-September, which should unlock the hidden

potential of the forint,” ING wrote in a note.

“Although the initial reaction from the European Commission

may not be 100% positive, our baseline assumes an agreement is

found and the RRF money is released.”

Elsewhere, the Polish zloty edged up 0.02% to

4.7150 versus the common currency a day before a meeting of the

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National Bank of Poland (NBP) where a Reuters poll of analysts

expects a base rate hike of 25 basis points to 6.75%.

Poland’s Prime Minister Mateusz Morawiecki said on Tuesday

he believes the cycle of rate hikes should come to an end soon.

“The unfavorable increase in global risk aversion may be

partially neutralized by a possible interest rate hike by the

Monetary Policy Council,” Bank Millennium wrote in a note.

“Despite its probably modest size (+25 basis points), more

important – for the markets – will be the continuation of the

tightening cycle.”

The Czech crown added 0.13% to trade at 24.580 to

the euro as data showed Czech working day adjusted industrial

output rose by 0.8% year-on-year in July, a touch faster than

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expected but slowing from the previous month.

Stocks in the region were mixed, with Warsaw’s equities

down 0.98% while Budapest added 0.5%.

CEE SNAPSH AT

MARKETS OT 1022

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 1146.3 1136.7 +0.85

9 300 %

.BUX Budapes 41338. 41130. +0.50 -18.50

t 02 96 % %

.WIG20 Warsaw <.wig20> 9 6 %

.BETI Buchare 12104. 11993. +0.93 -7.33%

st 42 36 %

.SBITO Ljublja <.sbito p na> 5 5 %

.CRBEX Zagreb <.crbex> 0 3 %

.BELEX Belgrad <.belex e> %

.SOFIX Sofia <.sofix> %

Yield Yield Spread Daily

(bid) change vs change

Bund in

Czech spread

Republi

c

CZ2YT= 0 ps

CZ5YT= 0 ps

CZ10YT ps

Poland

PL2YT= 0 ps

PL5YT= ps

PL10YT 0 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 Krishna Chandra Eluri)

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