March 5, 2019 / 11:07 AM / 16 days ago

CEE MARKETS-Forint hits five-week high, rate setter's comments buoy crown

    * Forint approaches 10-month high on monetary tightening
bets
    * Czech rate setter Holub sees 1 or 2 hikes in 2019; crown
firms
    * Romanian stocks extend gains, leu slips

    By Sandor Peto
    BUDAPEST, March 5 (Reuters) - The forint approached 10-month
highs on Tuesday on expectations the Hungarian central bank will
end seven years of loose policy at its meeting on March 26.
    The forint reached five-week highs at 315.4 versus
the euro, up a quarter of a percent.
    The Czech crown gained 0.1 percent to 25.61 by
1003 GMT, after rate setter Tomas Holub said the Czech central
bank may raise interest rates once or twice this year.
 The bank raised rates five times last year, then
held off at its meetings in December and February.
    Interest rates are still at record lows in Hungary and
Poland, but expectations are growing that the Hungarian central
bank will start to tighten liquidity at its upcoming meeting.
    "Comments from (rate setter Gyula) Pleschinger seemed to
have underpinned that, and this expectation is behind the
forint's strength, while turnover remains low," one
Budapest-based dealer said.
    Pleschinger said on Monday the bank's key inflation gauge
reaching 3 percent can be a serious signal to start normalising
policy, but it also needed to take a global slowdown and low
imported inflation into account.
    Hungarian retail sales released on Tuesday showed a pick-up
in annual growth to 5.4 percent in January. The growth, fuelled
by rising wages across Central Europe, may slow to about 4
percent this year from 6.6 percent in 2018 as inflation rises,
ING analyst Peter Virovacz said in a note.
    But the expansion of demand may turn towards services this
year from food last year, he said. Services is a key constituent
of core inflation closely watched by the central bank.
    Elsewhere in the region, the Polish central bank is expected
to keep rates on hold on Wednesday as inflation remains low
there. The zloty was steady, stuck to the weaker side
of the 4.3 psychological line against the euro.
    The leu gave up 0.1 percent after Romanian assets
gained on Monday, following an unusual decision by Standard &
Poor's not to deliver a rating outlook,  which raised hopes for
changes in a widely criticised bank tax.
    Romanian stocks, however, extended their gains. Bucharest's
main stock index, rose 0.6 percent, approaching their
highest in more than two months.
    Budapest's index rose half a percent, with OTP Bank
 -- which last week reported record-high profits for
2018 -- hovering around record highs. Oil group MOL shares
 rose 0.7 percent.
            CEE       SNAPSHOT   AT                         
            MARKETS             1103 CET            
                      CURRENCI                              
                      ES                            
                      Latest    Previous  Daily     Change
                      bid       close     change    in 2019
 Czech      <EURCZK=   25.6100   25.6410    +0.12%    +0.38%
 crown      >                                       
 Hungary    <EURHUF=  315.4400  316.1600    +0.23%    +1.79%
 forint     >                                       
 Polish     <EURPLN=    4.3017    4.3031    +0.03%    -0.28%
 zloty      >                                       
 Romanian   <EURRON=    4.7445    4.7405    -0.08%    -1.91%
 leu        >                                       
 Croatian   <EURHRK=    7.4240    7.4275    +0.05%    -0.19%
 kuna       >                                       
 Serbian    <EURRSD=  117.9300  118.0500    +0.10%    +0.31%
 dinar      >                                       
 Note:      calculated from               1800 CET          
 daily                                              
 change                                             
                                                            
                      Latest    Previous  Daily     Change
                                close     change    in 2019
 Prague                1080.35  1078.690    +0.15%    +9.51%
                                       0            
 Budapest             40806.48  40593.48    +0.52%    +4.26%
 Warsaw                2331.69   2328.05    +0.16%    +2.42%
 Bucharest             7850.81   7803.75    +0.60%    +6.33%
 Ljubljana  <.SBITOP    859.72    850.73    +1.06%    +6.90%
            >                                       
 Zagreb                1771.57   1764.41    +0.41%    +1.30%
 Belgrade   <.BELEX1    695.01    693.65    +0.20%    -8.75%
            5>                                      
 Sofia                  585.53    585.06    +0.08%    -1.50%
                      BONDS                                 
                      Yield     Yield     Spread    Daily
                      (bid)     change    vs Bund   change
                                                    in
 Czech                                              spread
 Republic                                           
   2-year   <CZ2YT=R    1.8320    0.0300   +233bps     +2bps
            R>                                      
   5-year   <CZ5YT=R    1.8180    0.0150   +213bps     +1bps
            R>                                      
   10-year  <CZ10YT=    1.9130    0.0000   +174bps     -2bps
            RR>                                     
 Poland                                                     
   2-year   <PL2YT=R    1.6360   -0.1170   +214bps    -13bps
            R>                                      
   5-year   <PL5YT=R    2.3110    0.0000   +262bps     -1bps
            R>                                      
   10-year  <PL10YT=    2.9550    0.0080   +278bps     -1bps
            RR>                                     
            FORWARD   RATE      AGREEMEN                    
                                T                   
                      3x6       6x9       9x12      3M
                                                    interban
                                                    k
 Czech Rep                2.25      2.32      2.35      2.03
            <PRIBOR=                                
            >                                       
 Hungary                  0.44      0.66      0.88      0.15
                                                    
 Poland                   1.73      1.74      1.76      1.72
                                                    
 Note: FRA  are for ask prices                              
 quotes                                             
 
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below