Briefing Romania

The monthly payments to the state budget generated additional selling interest in the EUR/RON along with the already familiar bond inflows. The pair tested below 4.7200 but failed to consolidate lower. We continue to see 4.7200 as a strong support for EUR/RON.

Romanian government bonds had a very good day again, the long end receiving solid inflows and dropping around 15 basis points. A dovish ECB today will likely support further buying interest along the curve.

Cash rates tightened for the period covering the beginning of the current reserve period, trading above 3.00% up to the 1W tenor. Once the dust settles over today’s budget payments we should see rates coming towards or even below the key rate again.