CEE MARKETS-Central Europe's currencies bounce back, yields fall

P10, INC. 0.00% Pre

P10, INC.

PX

10.54

10.54

0.00%

0.00% Pre

- Hungary's forint was more than 2% stronger on Tuesday and other central European currencies recouped major losses amid hopes of de-escalation in the U.S.-Israeli war on Iran, which also helped stocks and bonds to rebound.

U.S. President Donald Trump late on Monday predicted a quick end to the conflict but also threatened to escalate the war with Iran if it blocked oil shipments from the Middle East.

Oil prices, which have soared and raised inflation fears in global markets, were well off peaks and below $100 a barrel on Tuesday.

"It appears that the situation regarding oil prices has cooled, supported by efforts from the U.S. administration to signal that the conflict will not be a prolonged one," Erste Bank analysts said in a note.

Central European assets have been sensitive to worries of oil price shocks given the region's energy import dependence, and the forint has been the main lightning rod.

By 0836 the Hungarian forint EURHUF= had rebounded 2.45% versus Monday's close - before Trump's comments - and was at 385.00 per euro compared to a seven-month low of 400 on Monday. The rebound has helped the forint recoup around two thirds of its losses since the start of the Iran conflict.

Brokerage Equilor said trading was likely to remain volatile after the "major correction in the forint market", until there is certainty over the end of the war.

FIRST SIGNAL OF TURNING POINT?

The Czech crown EURCZK= firmed 0.3% to 24.3450 per euro.

Bond markets in the region also steadied, with yields off peaks and rates markets cooling.

Komercni Banka trader Marek Lesko said some of the move up in Czech rates markets in earlier sessions was exaggerated.

"Our impression is there were a lot of stop-losses going through. The cooldown is entirely justified in our view, especially since (policymaker Jakub) Seidler said the talk of hikes is premature," he said in a note.

Czech central banker Jakub Seidler said in a Reuters interview on Monday that discussion about a potential rate hike was "very premature" and that stable rates were most appropriate.

He added debate over potential easing could be revisited if the situation de-escalates and services price momentum continues to decelerate.

In Poland, the zloty EURPLN= ticked up 0.5% to trade at 4.2515 to the euro and the Romanian leu EURRON= edged 0.1% higher to 5.0908 per euro.

"Monday's turnaround in the oil market could be the first sign of a turning point," analysts at Polish bank PKO BP said.

On Monday, Romania's debt managers rejected all bids at a regular bond tender, the second failed auction so far in March.

A Reuters poll published on Monday shows analysts expecting the central bank to postpone rate cuts until the second half of 2026. Prior to the attack on Iran, some analysts said a cut was possible in May.

CEE MARKETS SNAPSHOT AT 0937 CET

CURRENCIES

Latest trade

Previous close

Daily change

Change in 2025

Czech crown

EURCZK=

24.3450

24.4200

+0.31%

-0.73%

Hungary forint

EURHUF=

385.0000

394.4500

+2.45%

-0.16%

Polish zloty

EURPLN=

4.2515

4.2755

+0.56%

-0.84%

Romanian leu

EURRON=

5.0908

5.0974

+0.13%

+0.06%

Serbian dinar

EURRSD=

117.2800

117.4400

+0.14%

+0.02%

Note: daily change calculated from 1800 CET

STOCKS

Latest

Previous close

Daily change

Change in 2025

Prague

.PX

2604.56

2552.8400

+2.03%

-3.02%

Budapest

.BUX

124293.35

120443.10

+3.20%

+11.94%

Warsaw

.WIG20

3333.97

3256.80

+2.37%

+4.71%

Bucharest

.BETI

27713.56

27121.15

+2.18%

+13.40%

BONDS

Yield (bid)

Yield change

Spread vs Bund

Daily change in spread

Czech Rep 2-year

CZ2YT=RR

3.7200

-0.3730

+146bps

-31bps

Czech Rep 5-year

CZ5YT=RR

4.1650

-0.3230

+168bps

-28bps

Czech Rep 10-year

CZ10YT=RR

4.6980

-0.2940

+186bps

-27bps

Poland 2-year

PL2YT=RR

3.8110

-0.2940

+155bps

-23bps

Poland 5-year

PL5YT=RR

4.9620

0.0000

+248bps

+5bps

Poland 10-year

PL10YT=RR

5.6300

0.0000

+279bps

+3bps

FORWARD RATE AGREEMENTS

3x6

6x9

9x12

3M interbank

Czech Rep

CZKFRA, PRIBOR=

3.70

3.89

3.71

3.52

Poland

PLNFRA, WIBOR=

3.72

3.70

3.62

3.79

Note: FRA quotes are for ask prices


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