Tuesday, 21 October 2014 Headlines 0.05 EUR/HUF 0.04 -0.01 -0.14 EUR/USD -0.08 correlations of 10 min changes ov er past 5 sessions FRA 3x6 % bps chng CZK 0.31 0 HUF 2.16 1 PLN 1.58 1 EUR 0.11 -1 GB % bps chng Czech Rep. 10Y 1.02 -2 Hungary 10Y 4.17 -9 Poland 10Y 2.68 2 Slovakia 10Y 1.40 1 CDS 5Y % bps chng Czech Rep. 47 0 Hungary 168 2 Poland 69 0 Slovakia 51 2 Source: Reuters Regarding this week’s trading, the regional calendar is, apart from Polish retail sales and unemployment to be released on Thursday, empty. The CEE currencies will therefore be driven by global events such as a fresh set of PMI data made available later this week or results of stress test performed in the euro area´s banking sector, which should be published during next weekend. EUR/HUF 318 316 314 312 310 308 306 304 302 300 Despite yesterday’s losses the forint remains around its four month highs. 10/8/2014 0.03 -0.04 0.36 9/24/2014 EUR/USD 0.15 EUR/PLN Yesterday a court in Budapest resumed a lawsuit with eleven commercial banks that had been accused of cartel practices in connection with a repayment scheme invented by state authorities in order to help holders of foreign currency mortgages three years ago. The banks appealed against a big fine imposed on them by a court of the first instance. The sentiment worsened further due to travel bans imposed by Washington on a group of Hungarian citizens allegedly involved in corruption cases. Although even the Hungarian prime minister does not know the names of persons put on the black list, the group apparently includes high-ranking state officials. Despite yesterday’s losses, the forint has remained close to its strongest levels achieved during the last four months. 9/10/2014 EUR/HUF 0.08 EUR/CZK EUR/CHF EUR/PLN FX Correlation Matrix 8/27/2014 -0.1 8/13/2014 0.3 1.21 7/30/2014 1.28 EUR/CHF 7/2/2014 EUR/USD The Central European currencies eased on Monday, wiping out their gains from the end of the last week. Like on Friday, the forint led the flock when troubles of banking sector negatively affected market sentiment in Hungary. 7/16/2014 0.2 6/4/2014 4.23 6/18/2014 0.5 EUR/PLN 5/7/2014 0.3 307.0 5/21/2014 27.56 EUR/HUF 4/9/2014 EUR/CZK Forint leads CEE currencies’ losses 4/23/2014 % chng 3/26/2014 Currencies EUR/HUF, last 150 day s. Source: Reuters Tuesday, 21 October 2014 Interest-rate Swap Curves 3,0 CZK HUF 120, 00 PLN 5 7 700, 00 100, 00 4 600, 00 2,0 160, 00 80, 00 5 500, 00 3 110, 00 60, 00 % 1,0 % 40, 00 3 300, 00 % 400, 00 2 60, 00 20, 00 200, 00 0 0 0 0,0 0, 00 -1 -1 -1 -1 -1 1 0 100, 00 3 4 5 5 7 7 6 6 - 40, 00 2Y 3Y 4Y 5Y change (bps) 6Y 7Y 10/20/2014 8Y 9Y 10Y 10/17/2014 10, 00 7 - 20, 00 -1,0 1 0 0, 00 -1 - 100, 00 2Y 3Y 4Y 5Y change (bps) 6Y 7Y 8Y 0 -1 -1 -2 2Y 3Y 4Y 5Y 6Y -2 -1 -1 7Y 8Y 9Y 10Y -2 -1 - 40, 00 9Y 10Y 10/20/2014 -1 10/17/2014 change (bps) 10/20/2014 10/17/2014 Calendar Country Tim e Indicator Period Forecast m /m y/y Actual m /m y/y Consensus m /m y/y Previous m /m y/y Contacts Brussels Research (KBC) Piet Lammens Peter Wuyts Joke Mertens Mathias van der Jeugt Dublin Research Austin Hughes Shawn Britton Prague Research (CSOB) Jan Cermak Jan Bures Petr Baca Bratislava Research (CSOB) Marek Gabris Budapest Research David Nemeth Global Sales Force Brussels Corporate Desk Institutional Desk France London Frankfurt Singapore +32 2 417 45 82 +32 2 417 46 25 +32 2 417 32 65 +44 207 256 4848 +49 69 756 19372 +65 533 34 10 +420 2 6135 3578 +420 2 6135 3574 +420 2 6135 3570 Prague +420 2 6135 3535 +421 2 5966 8809 Bratislava +421 2 5966 8820 +36 1 328 9989 Budapest +36 1 328 99 85 +32 2 417 59 41 +32 2 417 32 35 +32 2 417 30 59 +32 2 417 51 94 +353 1 664 6889 +353 1 664 6892 ALL OUR REPORTS ARE AVAILABLE ON WWW.KBC.BE/DEALINGROOM This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice. P. 2