As regional sentiment has become rosier, Hungary's forint and Poland's zloty firmed about 1% each versus the euro in late Tuesday trade, while the Czech and Slovak crowns gained only 0.4-0.5% within the day. On Hungary's secondary market, benchmark yields moved 1-3 bps sideways from late Monday levels. There was a turnaround on the region's stock exchanges, as well. The BUX traded its 3% decline to a 1.5% rise by market close, which is a favourable development for FX processes (positive for the HUF).
By 16:55 local time the HUF was quoted at 261.59/69 to the euro, compared with Monday's finish at 264.06/36. It is possible that trade will shift back to a range between 260-263 from 263-265.
Market players are still keen to hear more about the re-elected government's programme, due out at the end of the month. The wait-and-see attitude is likely to grow stronger in the remaining of the week and investors are unlikely to open new positions on the FX and bond markets.
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