Briefing Romania
Liquidity is back
EUR/RON
The EUR/RON tested above 4.6600 yesterday but the level is holding for now and we closed around 4.6570 on average turnover. While the lower carry could incentivise payers in EUR/RON, the upside potential looks as limited as ever to 4.6700 - for now.
Government bonds
The front end ROMGBs had most to gain from the better liquidity backdrop as yields fell as much as 10 basis points. Together with a slightly improved global risk sentiment this could keep the current trend afloat for a few days.
Money Market
Selling interest continued on the money market on improved liquidity conditions with most of the curve now trading inside the 2.50-3.50% corridor. We believe that the downward trend in rates is not likely to last long as the National Bank will be careful not to allow a persistent liquidity surplus in the market.
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