CE3 FX Resilient Despite Higher UST Yields

CE3 FX was resilient to the earlier strength in the dollar and weakness in global equity indices post-US data. Following the reversal in the DXY index and recovery in e-mini S&P since then, EURHUF and EURPLN extended losses, with the former last dealing close to the day’s lowest level around 384.00. EURPLN has now shed 2.4% from the beginning of Monday’s session, with the post-election bid in PLN yet to lose steam.

• As has been the case in recent weeks, CZK has lagged its regional peers with EURCZK just marginally lower on the day. On a MTD basis, spot gains of PLN, HUF and CZK against the EUR stand at 4.31%, 1.28% and -0.93%, respectively.
• Local government bond yields are following the trend in core FI, with yields on POLGBs, HGBs and CZKGBs higher across the curves. Notably, Poland and Hungary’s benchmark equity indices are 1.80% and 1.28% higher on the day, outperforming major European and US indices.
• Looking ahead, the data docket is relatively quiet in the region for the remainder of the week. PPI, Industrial Output and Retail Sales data are the highlights in Poland, while Consumer and Business Confidence data will cross in Czechia at the end of the week.