Briefing Romania
Political noise ignored already?
EUR/RON
The EUR/RON corrected lower yesterday, possibly on commercial flows as its regional peers have been under pressure. Trading below 4.7300 should be rather occasional in our view, but possible bond inflows could change the story again.
Government bonds
With political uncertainties apparently here to stay for an extended period, Romanian government bonds recovered all losses from the previous days as the yield curve shifted as much as 10 basis points lower yesterday. The move was well supported by regional developments as well, with Polish government bonds particularly well bid. Again, it looks like the external context still matters more for investors than local idiosyncratic factors.
Money market
The easing bias on cash rates continued, with the entire curve now below 3.00%. Gradual lower rates is what we expect for the upcoming days as well.
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