Top Stories
Top Stories
Wires

CEE MARKETS-Forint, zloty hit multi-week lows, crown focus on central bank

PRAGUE, July 9 (Reuters) - Hungary's forint fell to a more than five-week low against the euro on Tuesday after slower-than-expected inflation took some policy pressure off the central bank and a stronger dollar weighed on central Europe's currencies. The forint had dropped 0.1% to bid at 325.2 to the euro by 0830 GMT, its weakest since the end of May, while Poland's zloty lost 0.2% to 4.263, a three-week low. The Czech crown was a touch down at 25.536 to the euro. U.S. dollar strength has put a lid on the region's currencies as global investors re-assessed expectations of how much the Federal Reserve might cut interest rates this month. Stronger-than-expected payroll data at the end of last week tempered market expectations of cuts. Hungarian inflation data, which showed on Tuesday that price growth slowed to 3.4% last month, also pulled the forint down. Core inflation adjusted for the effects of tax changes slowed to 3.5% in June from 3.7% in May, the National Bank of Hungary said on Tuesday. The Hungarian central bank left interest rates unchanged last month and kept a dovish stance despite raising its inflation forecasts for the coming years, after the European Central Bank (ECB) flagged further easing. "With the expected monetary easing by the ECB and Fed, the National Bank of Hungary could win time, but decision makers will have to pay attention to the forint's exchange rate as a more significant easing ... could put upward pressure on inflation trends," brokerage Equilor said. Like Hungary, the Czech Republic has a tight labor market, keeping up pressure on inflation. June jobless figures on Tuesday showed the unemployment remained at a record low. The Czech central bank kept interest rates unchanged at its last meeting after eight hikes since 2017, the last in May. It also signaled a long pause in policy moves. CSOB said data, including inflation later this week, would not affect the crown much and the central bank's economic outlook was the focus. The bank releases an update on Aug. 1. "It will show whether the central bank will want to significantly rewrite its outlook under the pressure of negative development abroad, or even to act. However, we still consider the latter as less likely, hence the crown can still profit from the interest rate differential," CSOB analysts said.

CEE SNAPSHOT ATMARKET 1030S CET

CURRENCI ES

Latest Previou Daily Change

s

bid close change in 2019EURCZK= Czech <EURCZ 25.5360 25.5180 -0.07% +0.67%crown K=>EURHUF= Hungary <EURHU 325.2000 324.770 -0.13% -1.27%forint F=> 0EURPLN= Polish <EURPL 4.2634 4.2564 -0.17% +0.61%zloty N=>EURRON= Romania <EURRO 4.7265 4.7228 -0.08% -1.53%n leu N=>EURHRK= Croatia <EURHR 7.3945 7.3940 -0.01% +0.21%n kuna K=>EURRSD= Serbian <EURRS 117.5700 117.800 +0.20 +0.62%dinar D=> 0 %Note: calculated from 1800daily CET

change

Latest Previou Daily Change

s

close change in 2019.PX Prague 1050.89 1052.12 -0.12% +6.52%

00

.BUX Budapes 40511.83 40777.0 -0.65% +3.51%t 8.WIG20 Warsaw <.WIG2 2305.95 2339.07 -1.42% +1.29%

0>

.BETI Buchare <.BETI 8883.88 8877.53 +0.07 +20.32%st > %.SBITOP Ljublja <.SBIT 886.73 888.93 -0.25% +10.25%na OP>.CRBEX Zagreb <.CRBE 1884.35 1885.55 -0.06% +7.75%

X>

.BELEX15 Belgrad <.BELE 754.49 746.79 +1.03 -0.95%e X15> %.SOFIX Sofia <.SOFI 581.93 582.98 -0.18% -2.11%

X> BONDS

Yield Yield Spread Daily(bid) change vs change in

Bund

Czech spread

Republi c

CZ2YT=RR <CZ2YT 1.5140 0.0370 +224b +3bps2-year =RR> psCZ5YT=RR <CZ5YT 1.2680 -0.0480 +193b -6bps5-year =RR> psCZ10YT=R <CZ10Y 1.4560 -0.0090 +181b -3bpsR 10-year T=RR> ps

Poland

PL2YT=RR <PL2YT 1.5830 -0.1310 +231b -14bps2-year =RR> psPL5YT=RR <PL5YT 1.8510 0.0000 +252b -1bps5-year =RR> psPL10YT=R PL10Y 2.2430 0.0010 +260b -2bpsR 10-year T=RR> psFORWAR RATE AGREEMED NT3x6 6x9 9x12 3M

interbank

Czech CZKFR 2.17 2.07 1.95 2.17Rep A><PRI

BOR=>

Hungary <HUFFR 0.29 0.36 0.42 0.25

A><BUB OR=>

Poland <PLNFR 1.74 1.71 1.67 1.72

A><WIB OR=>

Note: are for askFRA prices

quotes

(Writing by Jason Hovet and Robert Mueller; Additional reporting by Kriszta Than; Editing by Edmund Blair)