Briefing Romania
Carry at deposit facility earlier than expected
EUR/RON
The EUR/RON returned above 4.6500 yesterday, possibly on the back of lower carry which incentivizes buyers. We maintain our call for a gradual move to the 4.6700 area towards the year-end.
Government bonds
The better than expected inflation numbers reignited a buying spree for ROMGBs yesterday. The back-end of the curve had most to gain as yields dropped by as much as 15 basis points in some ISINs. Front-end bids were also supportive, pushing the curve c.4-5 basis points lower. The five-year euro-denominated auction came in as expected, as demand was broadly in line with the 6 November auction, when all bids were rejected. This time, the Ministry of Finance allocated EUR251.5 million at a 0.95% average and 0.96% maximum versus the initial EUR200 million target.
Money Market
The overnight implied yield dropped again and is now trading at the 1.50% deposit facility as liquidity conditions are overly supportive. Tenors above 1M remained unchanged, possibly on expectations that the current soft stance in cash rates won’t last too long.
This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
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