CEE MARKETS-Forint, leu steady before ratings reviews
10/10/2025 11:21
BUDAPEST, Oct 10 (Reuters) - The Hungarian forint and the Romanian leu held steady on Friday after recent weakening, with markets eyeing rating reviews due after hours and analysts expecting no surprise downgrades. The forint has fallen off a 16-month high this week while the leu has crept back to its weakest levels since last May, when market stress rose over a re-run Romanian presidential election and jitters over the country's rating. In Hungary, the forint EURHUF= was up 0.1% by 0924 GMT, trading at 390.50 to the euro as it regained some losses from the beginning of the week when government officials said central bank rates were too high, raising nerves about potential pressure on the central bank. Analysts still expect interest rates to stay in a holding pattern and the bank has highlighted the need for stable policy for now. Focus was also on an S&P rating review to be published in the evening after the agency put a "negative outlook" on Hungary's BBB- rating in April. A cut would demote the country into so-called "junk" territory. "Overall, we can expect the rating and the negative outlook to remain unchanged, while the credit rating agency may issue a warning over budgetary risks," brokerage Equilor said in a note. Most of central Europe is battling high fiscal deficits, with Romania's currently the highest in the European Union. It, too, was facing a regular S&P review due out in the evening. The leu EURRON= was mostly stable, but has gradually fallen back to its weakest levels since May, when markets sold off in the run-up to the presidential election. It has been testing a break past the 5.10 per euro level, trading on Friday at 5.0960 per euro on Friday. Centrist Nicusor Dan had won the May election and a new government has since started implementing tax hikes and other measures to rein in the deficit, which reached over 9% of GDP in 2024, three times the EU limit. Jakub Kratky, an analyst at Generali Investments CEE, said the leu's weakening has been mainly due to external factors, like the recent strength of the U.S. dollar which is also weighing on other central European currencies. He saw little chance of a downgrade below investment level, as investors had feared earlier this year. "There is no risk of a cut to junk, because fiscal consolidation goes on," he said. Elsewhere, the Polish zloty EURPLN= was mostly stable after losses following an interest rate cut on Wednesday. Polish central bank chief Adam Glapinski said on Thursday the Monetary Policy Council still saw some room to cut. The Czech crown EURCZK= firmed 0.15% to 24.303 per euro, after falling from a 25-month high of 24.21 this week. In Prague, shares in lender MONETA Money Bank MONET.PR rose as much as 4% after the company proposed an extraordinary dividend. Prague's main index .PX was up by 0.36%.
| CEE MARKETS SNAPSHOT AT 1124 CET | |||||
| CURRENCIES | Latest trade | Previous close | Daily change | Change in 2025 | |
| Czech crown | EURCZK= | 24.3030 | 24.3400 | +0.15% | +3.73% |
| Hungary forint | EURHUF= | 390.5500 | 390.9000 | +0.09% | +5.35% |
| Polish zloty | EURPLN= | 4.2575 | 4.2590 | +0.04% | +0.45% |
| Romanian leu | EURRON= | 5.0960 | 5.0963 | +0.01% | -2.34% |
| Serbian dinar | EURRSD= | 117.0700 | 117.1700 | +0.09% | -0.10% |
| Note: daily change calculated from 1800 CET | |||||
| STOCKS | Latest | Previous close | Daily change | Change in 2025 | |
| Prague | .PX | 2370.23 | 2361.6800 | +0.36% | +34.66% |
| Budapest | .BUX | 101635.04 | 101386.48 | +0.25% | +28.12% |
| Warsaw | .WIG20 | 2860.68 | 2874.30 | -0.47% | +30.50% |
| Bucharest | .BETI | 21664.43 | 21619.44 | +0.21% | +29.57% |
| BONDS | Yield (bid) | Yield change | Spread vs Bund | Daily change in spread | |
| Czech Rep 2-year | CZ2YT=RR | 3.4900 | -0.0010 | +150bps | +1bps |
| Czech Rep 5-year | CZ5YT=RR | 3.9500 | -0.0060 | +167bps | +1bps |
| Czech Rep 10-year | CZ10YT=RR | 4.4270 | -0.0070 | +175bps | +2bps |
| Poland 2-year | PL2YT=RR | 4.1660 | -0.0220 | +218bps | -1bps |
| Poland 5-year | PL5YT=RR | 4.8180 | -0.0220 | +254bps | +0bps |
| Poland 10-year | PL10YT=RR | 5.4410 | -0.0500 | +276bps | -2bps |
| FORWARD RATE AGREEMENTS | 3x6 | 6x9 | 9x12 | 3M interbank | |
| Czech Rep | CZKFRA, PRIBOR= | 3.57 | 3.57 | 3.58 | 3.53 |
| Poland | PLNFRA, WIBOR= | 4.18 | 3.90 | 3.78 | 4.53 |
| Note: FRA quotes are for ask prices | |||||
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