* Global sentiment improves, triggers fx and stocks rebound
* Czech central banker reiterates gradual rate hikes are
* Hungarian mortgage scheme less painful to banks than
* OTP, FHB banks rise boosts Budapest stock index to record
(Adds Polish economic data)
By Sandor Peto and Jason Hovet
BUDAPEST/PRAGUE, May 19 Central European
currencies and stocks rebounded on Friday, with Budapest's stock
index hitting a record high as risk appetite returned in
global markets and a batch of domestic news improved the outlook
of financial sector stocks in the region.
A Czech central banker reiterated the possibility of gradual
rate hikes and a deal in Hungary about a certified mortgage
lending scheme put less stress on banks' spreads than expected,
boosting the shares of OTP and FHB.
The crown, the forint and the leu
firmed 0.2 percent against the euro by 1340 GMT, with
the Czech unit trading at 26.532.
Czech central bank (CNB) board member Marek Mora said in an
interview in the Hospodarske Noviny daily that the bank should
raise interest rates slowly and gradually, but if the exchange
rate does not rise, it may lead to a faster path.
The CNB is the first central bank in the region to flag that
a reversal of years of interest rate cuts may be near.
Early last month, the bank opened the way for a firming of
the crown, which can push inflation lower, removing a cap which
had kept the currency weaker than 27 since 2013.
The currency has firmed less than investors, who have bought
tens of billions of euros worth of crowns, had expected.
"If the koruna (crown) does not significantly strengthen to
less than EUR/CZK 26 we may see the CNB decide - for the first
time in almost 10 years - to hike its 2W (two-week) repo rate
this year," Komercni analysts said in a note.
The region's main currencies and stock indices are near
multi-week or even multi-year highs despite a fall this week due
to the worries over U.S. President Donald Trump's future.
Investors also watch Brazil's corruption crisis and economic
Figures released in the region this month have confirmed
that its economies are growing at robust rates, partly fuelled
by surging wages, without signs of a surge in inflation or
budget deficits, at least for now.
Polish data for April, released on Friday, showed slower
than expected growth in retail sales, industrial output and
The zloty, however, shrugged off the figures and
firmed about half a percent and briefly pierced the 4.2
psychological line against the euro, extending a technical
rebound from levels near the 4.23 support line.
"I suppose that markets bet that economic upturn would
sustain, which would make MPC (central bank) finally change its
dovish stance," said Piotr Poplawski, senior economist at ING
BSK in Warsaw.
CEE MARKETS SNAPSH AT 1540 CET
Latest Previo Daily Change
bid close change in
Czech crown 26.532 26.572 +0.15 1.79%
0 0 %
Hungary 309.10 309.85 +0.24 -0.09%
forint 00 50 %
Polish zloty 4.2021 4.2206 +0.44 4.80%
Romanian leu 4.5625 4.5696 +0.16 -0.60%
Croatian kuna 7.4440 7.4535 +0.13 1.49%
Serbian dinar 122.93 123.00 +0.06 0.34%
00 00 %
Note: daily calculated previo close 1800
change from us at CET
Latest Previo Daily Change
close change in
Prague 1018.7 1011.7 +0.70 +10.5
9 1 % 4%
Budapest 34798. 34528. +0.78 +8.73
32 85 % %
Warsaw 2315.4 2295.1 +0.89 +18.8
9 4 % 7%
Bucharest 8492.3 8430.3 +0.74 +19.8
0 3 % 6%
Ljubljana 784.68 777.16 +0.97 +9.35
Zagreb 1865.5 1867.1 -0.08% -6.48%
Belgrade 738.95 731.38 +1.04 +3.01
Sofia 658.99 659.51 -0.08% +12.3
Yield Yield Spread Daily
(bid) change vs change
2-year -0.084 0.051 +059b +2bps
5-year 0.037 0.05 +039b +4bps
10-year 0.877 0.03 +051b +1bps
2-year 1.946 0.009 +262b -2bps
5-year 2.773 0.007 +312b -1bps
10-year 3.339 -0.002 +297b -2bps
FORWARD RATE AGREEMENT
3x6 6x9 9x12 3M
Czech Rep <PR 0.37 0.45 0.55 0
Hungary <BU 0.19 0.24 0.33 0.15
Poland <WI 1.749 1.769 1.809 1.73
Note: FRA are for ask