CEE MARKETS-Czech crown extends 2020 rally, tests post-intervention high

Gergely Szakacs and Jason Hovet

BUDAPEST/PRAGUE, Jan 15 (Reuters) - The crown firmed against the euro on Wednesday, testing a multi-year high and outperforming central European peers as markets weighed chances of whether Czech interest rates could rise this year. The Czech National Bank has voted 5-2 at its last three monetary policy meetings to keep rates stable, with the minority wanting a hike, and is balancing domestic inflationary pressures with uncertainties abroad affecting. Policymaker comments this week showed debate over tighter policy was still alive, helping push the crown towards the key 25 mark versus the euro from a 23-month high scaled on Tuesday. A spike in inflation, seen in data on Monday, has also boosted the market. At 0929 GMT, the crown was 0.1% stronger at 25.124 per euro, just off its highest level of 25.120 seen since the central bank ended an intervention regime keeping the crown weak in 2017. CSOB analysts said a break of that level would open space to a test of the psychological 25 per euro level. "Continuing global optimism could help the crown move close to 25 in the coming days. But we are staying more cautious with the outlook for the whole year," CSOB said. Most other central European currencies were unchanged or a tad weaker. The Czech unit is off to a blistering start, gaining over 1% versus the euro in the first two weeks of the year.

In contrast, the Hungarian forint, last year's worst performer in the region due in part to the National Bank of Hungary's loose policy stance, continued its struggles, already shedding another 0.6% against the euro. The difference in policies was seen in central banker comments. Czech central bank board member Vojtech Benda, a known hike supporter, said on Wednesday the bank has room to raise interest rates this year and it would be better to move sooner than later. Vice-Governor Marek Mora, who voted in the minority for a hike in September but has backed stable rates since then, also said late on Monday he saw stable or mildly higher interest rates this year as the most likely case. For the forint, there was little help from the Hungarian central bank, which has repeatedly said it had no exchange rate target and was only looking at long-term currency movements to assess whether they affected inflation trends. While headline inflation rose to a seven-year-high in December, the central bank's preferred measure of lasting price trends ticked lower, further reducing the likelihood of any shift away from its commitment to keep policy accommodative. After Tuesday's bounce to stronger levels, the forint resumed easing on Wednesday, shedding 0.3% in morning trade. "The short-term trend is still pointing (to weakening), especially as long as the EUR/HUF remains above short-term moving averages," analysts at Erste Investment said in a note.



Latest Previou Daily Change


bid close change in 2020EURCZK Czech <EURCZK 25.1240 25.1550 +0.12% +1.23%= crown =>EURHUF Hungary <EURHUF 333.150 332.220 -0.28% -0.60%= forint => 0 0EURPLN Polish <EURPLN 4.2247 4.2185 -0.15% +0.75%= zloty =>EURRON Romanian <EURRON 4.7791 4.7805 +0.03% +0.19%= leu =>EURHRK Croatian <EURHRK 7.4460 7.4463 +0.00% -0.01%= kuna =>EURRSD Serbian <EURRSD 117.600 117.570 -0.03% -0.03%= dinar => 0 0Note: calculated from 1800daily CET


Latest Previou Daily Change


close change in 2020.PX Prague 1137.04 1139.10 -0.18% +1.92%


.BUX Budapest 45009.0 44960.3 +0.11% -2.33%0 1.WIG20 Warsaw <.WIG20 2169.29 2182.96 -0.63% +0.89%>.BETI Buchares 10048.2 10035.4 +0.13% +0.71%t 8 7.SBITO Ljubljan <.SBITO 972.52 974.13 -0.17% +5.04%P a P>.CRBEX Zagreb <.CRBEX 2051.99 2052.42 -0.02% +1.71%>.BELEX Belgrade <.BELEX 794.15 801.82 -0.96% -0.94%15 15>.SOFIX Sofia <.SOFIX 578.94 580.10 -0.20% +1.90%>Yield Yield Spread Daily(bid) change vs Bund change


Czech spread


CZ2YT= 2-year <CZ2YT= 1.7800 0.0670 +237bp +7bpsRR RR> sCZ5YT= 5-year <CZ5YT= 1.5460 -0.0660 +205bp -5bpsRR RR> sCZ10YT <CZ10YT 1.7010 0.0000 +190bp +3bps=RR 10-year =RR> s


PL2YT= 2-year <PL2YT= 1.5130 -0.0250 +210bp -2bpsRR RR> sPL5YT= 5-year <PL5YT= 1.9430 -0.0270 +244bp -1bpsRR RR> sPL10YT <PL10YT 2.2750 -0.0030 +247bp +2bps=RR 10-year =RR> s


3x6 6x9 9x12 3M

interba nk

Czech <CZKFRA 2.28 2.28 2.27 2.17Rep ><PRIBO


Hungary <HUFFRA 0.26 0.34 0.42 0.16><BUBOR


Poland <PLNFRA 1.75 1.76 1.78 1.71><WIBOR


Note: are for askFRA prices


(Reporting by Gergely Szakacs in Budapest and Jason Hovet in Prague Editing by Giles Elgood)