CEE MARKETS-Forint jumps after larger-than-expected cenbank rate hike

BY Reuters | ECONOMIC | 09/27/22 09:00 AM EDT
    By Anita Komuves
       BUDAPEST, Sept 27 (Reuters) - The Hungarian forint
jumped while long-term government bond yields were stable on
Tuesday after the National Bank of Hungary delivered a 125 basis
point rate hike, above expectations, raising the benchmark
interest rate to 13%.
    The forint firmed 0.85% on the day to 405.10 per
euro, up from 407.85 where it was trading right before the rate
    Most analysts in a Reuters poll expected a 100 bps hike,
with one analyst who pencilled in a 125 bps increase to 13%.

    "Investors are waiting for the press conference now to see
what the reason for this big hike was. There is a possibility
that this was one big step that signals the end of the
tightening cycle," an FX trader in Budapest said.
    Hungarian central bank Governor Gyorgy Matolcsy will hold a
news conference at 1300 GMT.
    Deputy Governor Barnabas Virag told reporters last Thursday
that the NBH could consider ending its rate rise cycle after
Tuesday's meeting.
    Long-term government bond yields were not immediately moved
after the decision, a fixed-income trader said.
    The yield on the benchmark 10-year bond was about 9.56%,
unmoved from levels in the previous session and near a 10-year
high which it had reached earlier this month.
    Policymakers across central Europe are seeking to end a
cycle of rate hikes running since last year even as inflationary
pressures remain and the world's major central banks keep
pursuing higher rates.
    The Czech National Bank, meeting on Thursday, already left
rates unchanged in August for the first time in over a year.
    The Polish zloty weakened 0.22% to 4.7595 versus
the common currency. It was pressured by global recession fears
and growing risk aversion towards emerging currencies, Bank
Millennium wrote in a note.
                  CEE      SNAPSH   AT
                  MARKETS  OT      1447
                           Latest  Previo  Daily   Change
                           bid     close   change  in
 EURCZK  Czech    0       0       %       %
 EURHUF  Hungary  00      00       %
 EURPLN  Polish   EURRON  Romania  %
 EURHRK  Croatia  EURRSD  Serbian  00      50       %       %
         Note:    calculated from          1800
         daily                             CET

                           Latest  Previo  Daily   Change
                                   close   change  in
 .PX     Prague            1150.2  1151.0  -0.08%
                                0     800
 .BUX    Budapes           38913.  38528.   +1.00  -23.28
         t                     72      86       %       %
 .WIG20  Warsaw   5       8       %       %
 .BETI   Buchare           10805.  10622.   +1.72  -17.27
         st                    23      15       %       %
 .SBITO  Ljublja  8               %
 .CRBEX  Zagreb   4       3
 .BELEX  Belgrad  %       %
 .SOFIX  Sofia    Yield   Yield   Spread  Daily
                           (bid)   change  vs      change
                                           Bund    in
         Czech                                     spread
 CZ2YT=           0      ps
 CZ5YT=           0      ps
 CZ10YT           0      ps
 PL2YT=           0      ps
 PL5YT=           0      ps
 PL10YT           0      ps
                           3x6     6x9     9x12    3M
         Czech    Hungary  Poland   Note:    are for ask
         FRA      prices
 (Additional reporting by Pawel Florkiewicz in Warsaw; editing
by Uttaresh.V and Angus MacSwan)

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