Snaps
21 November 2018

Briefing Romania

Upside pressure in the money market

RomaniaBriefing.jpg

 - Source: Reuters
Source: Reuters

EUR/RON

The EUR/RON remains in a rather listless state these days, trading narrowly in the same 4.6600-4.6700 range on low turnover. The pick-up in money market yields is likely capping the upside pressures while the downside looks fairly limited by fundamentals pointing towards a weaker leu. Hence, more range trading.

Government bonds

In ROMGBs we had a quiet day with yields remaining broadly flat compared to the previous day. As already mentioned, some noise around the government reshuffle could still persist, but for now, the market seems muted.

Money Market

The upside pressure on money market yields continues. The beginning of the next reserve period trades well above the Lombard rate as the market seems to be bracing for no repo on Monday 26 November. The turn of the year looks under pressure as well as the 1M-2M curve has shifted some 20 basis points higher towards the 3.55-3.65% area. Otherwise, cash rates for the few days left on the current reserve period are well anchored around the key rate.

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

 - Source: Reuters, Bloomberg, ING
Source: Reuters, Bloomberg, ING