Marginal market reaction to US elections in CEE

Donald Trump will be Americas 47th president. The extent to which President Trump realizes his election promises will influence the economic and market development in Central and Eastern Europe. In response to the news, CEE currencies depreciated against the euro on Wednesday morning. The EURHUF touched 412 briefly, the EURPLN moved up to 4.37, while the EURCZK went up to 25.4. The initial reaction was short-lived and toward the end of the day the CEE currencies have strengthened back. On the bond market we have seen long-end of the curve moving up, the most in Hungary, Poland and Romania. But even in these three countries the change was rather marginal in weak-to-date terms as 10Y yields are only 6 basis points up. In the US the long end of the curve is higher by almost 15 basis points weak-to-date. In our latest CEE Special Report Will Hungarian forint remain weak? we zoom in on Hungary that we see as the most vulnerable currency to global development.