(Updates with forint and bond market moves, traders’ comments) By Anita Komuves BUDAPEST, Nov 23 (Reuters) – The Hungarian forint weakened on Wednesday as bond yields rose on a German media report , who said the European Commission could recommend that member states freeze €7.5 billion from three cohesion programs earmarked for Hungary. The currency gave up its gains from the start of the day and fell 0.56% on the day and trades at 409.20 per euro at 1402 GMT. “The forint fell soon after the FAZ report came out, and the bond market was also hit at the same time,” said a forex trader in Budapest. The German newspaper Frankfurter Allgemeine Zeitung reported, citing unnamed sources, that European Commission officials have concluded that Hungary has not sufficiently delivered on its anti-corruption promises and would recommend that 7.5 billion euros are reserved for Hungary. Although Prime Minister Viktor Orban won’t release all the money, he would likely get conditional Commission approval for some 7.2 billion euros earmarked for Hungary from the bloc’s stimulus fund to help economies to recover from the COVID-19 pandemic. Yields on long-term government bonds jumped about 40 to 60 basis points after the report was released, a fixed-income trader said. The yield on the benchmark 10-year bond was around 8.30%. Budapest shares were down 1.58%. Market participants are closely watching negotiations between Hungary and the European Union over the funds, which has affected the forint rate, the worst performer in Central Europe so far this year, as it lost nearly by 10%. The central bank announced an emergency rate hike last month and introduced the rapid deposit facility, which has helped strengthen the forint, but a deal on EU funds is seen as essential for the currency to stand up. significantly strengthens, traders and analysts said. On Tuesday, the central bank left its key rate at 13% and pledged to maintain tight monetary conditions for an “extended period”. The Czech koruna was flat as central bank governor Ales Michl said interest rates were at high enough levels at the moment and were restricting economic activity. Elsewhere, the Polish zloty gained 0.26% to trade at 4.6980 against the common currency. CEE SNAPSH AT MARKET OT 1502 S CET CURREN CIES Last Daily Change US Supply at Close 2022 EURCZK Czech 0 0% % EURHUF Hungary 00 00 EURPLN Polish % EURRON Romania % EURHRK Croatia % EURRSD Serbian 00 00 % % Note: calculated 1,800 daily from CET change Last change previous daily us close change in 2022 .PX Prague 1237.8 1238.1 -0.02% 6,200 .BUX Budapes 44617. 45335. -1.58% -12.03 t 58 11 % .WIG20 Warsaw <.WIG2 1713.2 1717.7 -0.26% - 24.43 0> 0 5% .BETI Buchare <.BETI 11563. 11559. +0.04 -11.47 st > 78 06%% .SBITO Ljublja <.SBIT 1071.7 1073.8 -0.19% -14.63 P na OP> 8 0% .CRBEX Zagreb < .CRBE 1902.9 1901.1 +0.10 -8.48% X> 5 4% .BELEX Belgrad <.BELE 807.14 806.57 +0.07 -1.66% 15 e X15> %.SOFIX Sofia <.SOFI 593.54 594.39 -0.14% -6.63% X> Yield Yield Spread Daily (bid) change vs change Bund in Czech spread Republi c CZ2YT= 0 ps CZ5YT= 0 ps CZ10YT ps Poland PL2YT= ps PL5YT= ps PL10YT ps FORWAR D 3×6 6×9 9×12 3M interb ank Czech Hungary Poland Note: are at ask FRA price quote ************************************** ******** *** ************ (Additional reporting by Alan Charlish in Warsaw and Jason Hovet in Prague; Editing by Shounak Dasgupta and Maju Samuel)
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