Central European Daily

Tensions between Russia and Ukraine has eased yesterday somehow after Vladimir Putin said that he would use military forces in Ukraine only in extreme case and that he did not consider joining Crimea to Russia. Relief was visible also in Central Europe. The Hungarian forint together with Polish zloty wiped out its Monday losses, while the Czech koruna has remained stable around 27.33 EUR/CZK. Also Polish and Hungarian government bonds, which were hit substantially by Ukrainian crisis recovered yesterday. While the Polish 10 year government bond yield drop yesterday by 5 bps, the Hungarian one felt even by 24 bps. Nevertheless in our view the crisis is far from being solved and markets will undoubtedly need to watch all development carefully.