Central European Daily

CEE currencies gained yesterday as disappointing U.S. payrolls suggested that quantitative easing would not lose strength for a long period of time. Surprisingly enough, the Hungarian forint profited most, when it reached its 3-month high. No wonder then, that the government debt management agency would like to use the window of opportunity and to launch a foreign currency denominated bond. However, the schedule and details of the new issuance have not been known yet. The regional fixed income market profited from recent developments as well. Hungarian 10Y government bond yields continue to slide (by 2 basis points yesterday). Also Czech yields got under pressure ahead of today’s auction of 3-year and 6-year government bonds. Given missing inflation impulses in the Czech economy, the auction of bonds with relatively short maturities should attract sufficient demand.