Briefing Romania

The EUR/RON traded in a tight range yesterday and closed just above 4.7200 after an uneventful day. With no important data on the calendar, we expect the same 4.7150-4.7250 range for today.

The end of month usually brings some buying flows in ROMGBs on behalf of local pension funds. Little has moved though and if anything, the curve actually traded a touch more defensive after Parliament approved the pension law, which envisages substantial annual increases until 2022. The July auction calendar is still expected by tomorrow at the latest.

On the money market, things look quite calm, with carry slightly above the key rate and the longer end stable. We see limited room for further curve compression from now on as the longer end already trades at, or even below, the 3.50% Lombard rate.