Snaps
31 October 2019

Briefing Romania

Market cautious after the Fed

Romania_in_Europe.jpg

 - Source: Refinitiv Datastream
Source: Refinitiv Datastream

EUR/RON

The EUR/RON continued to trade sideways in a narrow 4.7560-4.7590 range. We expect it to remain in the 4.7500-4.7600 range in upcoming days, with upside tests more likely.

Government bonds

Romanian government bonds traded relatively defensively again yesterday, ahead of the Federal Reserve meeting. The same mood is likely to prevail today, as markets seemed to interpret the Fed’s action as a relatively hawkish cut (more on this here). Otherwise, the November auction calendar is set to be released in coming days though no surprises are expected in terms of issuance target.

Money market

Cash rates continued to inch lower towards the 2.50% key rate. The budget deficit numbers for September explain to some extent the current liquidity surplus we see in the market (more on the latest budget deficit data here).

 - Source: Refinitiv Datastream, ING estimates
Source: Refinitiv Datastream, ING estimates