Snaps
6 September 2019

Briefing Romania

Government bonds sold off 

Romania_in_Europe.jpg

 - Source: Reuters
Source: Reuters

EUR/RON

The EUR/RON inched slightly higher yesterday on below-average turnover and closed around 4.7300. We expect range trading around 4.7300 today ahead of the US labour market report.

Government bonds

Romanian government bonds sold off yesterday following core markets, which trimmed rate cut expectations from the Federal Reserve after a better-than-expected US ISM non-manufacturing survey. Yields on long-end RON government bonds inched around 10 basis points higher. The Ministry of Finance rejected all bids for its September-2031 auction yesterday due to poor demand, given the secondary market backdrop with a bid-to-cover ratio at 0.68x and average yield of 4.37%. The 1y T-bill auction went well with a RON200 million auction being sold at a 3.10% average and maximum yield on good demand with a bid-to-cover ratio at 3.3x.

Money market

The cash rate was little changed yesterday, staying just above the NBR key policy rate of 2.50%. Monday's NBR regular deposit taking auction should offer a better picture about surplus liquidity in the money market.

 - Source: Reuters, ING estimates
Source: Reuters, ING estimates