CEE FX: Risk-on bounce but policy still key – ING
ING’s Frantisek Taborsky notes that headlines on a possible end to the US-Iran conflict triggered a risk-on move, helping Central and Eastern European currencies erase recent losses. He highlights a likely Czech National Bank rate hike next week and a baseline 25 bp cut from the National Bank of Hungary, with scope for 50 bp if EUR/HUF rallies towards 350 in a post-conflict relief scenario.
Regional currencies benefit from risk-on tone
"Yesterday's headlines about a possible end to the US-Iran conflict quickly switched the market back into risk-on mode, with CEE currencies benefiting before the end of trading. The zloty erased previous losses after touching the upper edge of the current 4.225-260 range. EUR/HUF tested new lows below 354, and a positive mood can be expected at today's opening."
"From the perspective of oil prices at this moment, it seems that the current decline is not enough to change central banks' thinking. The genie is already out of the bottle, and the impact on inflation is already visible."
"The Czech National Bank is likely already determined to hike rates next week, in our opinion, and even a quick end to the US-Iran conflict would not change this."
"The National Bank of Hungary may be a different story, and while a 25bp rate cut in two weeks is our baseline, a 50bp move cannot be ruled out. If we were to see a quick rally in the forint closer to 350 per euro in the post-conflict positive mood, it could change the NBH's thinking and speed up easing."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Morgan Stanley: The expansion value of BHP South Australia copper mine is still underestimated, on-site inspection may become a catalyst for revaluation, “Overweight” rating maintained.
Morgan Stanley released a research report, maintaining an "Overweight" rating on BHP Group Limited (Australian shares) and a target price of 68 AUD.
Deutsche Bank remains bullish on Palo Alto Networks (PANW.US) ahead of earnings: Q1 results expected to be solid, platform advantages will help expand market share.
Deutsche Bank's latest research report predicts that Palo Alto Networks will deliver solid performance in the first quarter, with all key metrics exceeding market expectations, although the margin of outperformance may narrow compared to the previous quarter.
On the eve of Anthropic (ANT.US) IPO: $19 billion in passive buying on the way, will “SpaceX-style” index arbitrage be repeated?
From SpaceX to Anthropic: Giant new listings adopt a new approach.
Amidst extramarital affair scandal and Nvidia’s stock plummet, “The Big Short”: Short-term may be an “excellent trade,” but long-term remains bearish
Burry admitted that if he did not already hold a short position, the sharp drop caused by the scandal might be a good contrarian buying opportunity—but he himself made it clear he would not participate. The fatal risk lies in the possibility that this turmoil could trigger regulatory investigations into its "mafia-style" business practices and export controls. Combined with the risks of over-investment in AI, its competitive advantage is expected to quickly narrow, so he remains firm in his short position.
Crypto prices
More
