Briefing Romania

EUR/RON turnover decreased significantly yesterday compared to the previous day, while the pair was stable around 4.7500. In our view this doesn’t change the bigger picture of underlying upside pressures for the pair. Range for today: 4.7450-4.7600.

After a relatively quiet session, the weaker than expected US consumer data prompted some buying interest across the regional local currency debt markets as investors likely foresee the need for additional easing from the US Federal Reserve. Hence, ROMGBs benefited and yields inched two to three basis points lower at the longer end. With no major local data to be released in coming days we believe that the market will remain at the mercy of global sentiment.

In line with our view, cash rates have continued to tighten and trade above 3.00%. The budget payments due today will likely keep the pressure elevated at the front end at least.