April 17, 2019 / 10:09 AM / a year ago

CEE MARKETS-Forint outperforms in cautious region ahead of euro zone PMIs

    * Volatile forint firms in line with emerging fx index
    * CEE investors are cautious ahead of key euro zone PMI
    * Warsaw stock index outperforms, partly driven by Santander

    By Sandor Peto
    BUDAPEST, April 17 (Reuters) - The forint set a new 3-week
high against the euro on Wednesday, outperforming Central
European peers as it benefited from increased appetite for
emerging market currencies and stocks.
    MSCI's indexes for emerging market stocks and
currencies rose moderately as an unexpected
recovery in China's economy reduced fears of a global slowdown.
    Currencies in the European Union's eastern states were
mostly steady on investor caution ahead of key purchasing
managers' indexes (PMI) due on Thursday from the euro zone.
    Central European economies have lost some steam after robust
growth last year and a slump in demand in their main Western
export markets, mainly Germany, could slow them further.
    The forint was 0.2 percent firmer at 319.17 versus
the euro by 0848 GMT, in line with the MSCI currency index,
while the zloty was flat at 4.2742, near 2-1/2-month
    Polish wages rose at a robust 5.4 percent annual rate in
March, though below analysts' 7.2 percent forecast.
    The forint has become the region's most volatile unit in the
past month, taking the place of the leu, which has
calmed down as tax measures which had caused jitters for months
in Bucharest markets got watered down.    
    The forint has weakened and has been swinging around the 320
level against the euro after the Hungarian central bank late
last month dropped its guidance of gradual policy tightening.
    March data released since then showed a rise in Hungary's
annual inflation near the top of the bank's 2-4 percent target.
    The forint extended gains on Wednesday after piercing its
100-day moving average in the previous session.
    "Other emerging market units (are) firm, too... but if euro
zone PMIs are weak tomorrow, that will weaken the euro, and
through that the forint as well," one Budapest-based dealer
    Regional government bonds mostly tracked a rise in Bund
yields, with yields on Poland's 10-year paper trading at 2.876,
up 2 basis points.
    The region's equities indexes were flat or moderately
    Warsaw's blue-chip index gained more than its
peers, adding 0.7 percent, partly driven by a 2.3 percent rise
in the shares of Santander Bank Polska to a 14-month
    Its Spanish parent bank, Banco Santander, which
plans to combine its custody and asset servicing operations with
Credit Agricole, also approached 8-month highs in
    The index of Warsaw-listed banks was near its
highest levels in almost three months. 
            CEE       SNAPSHOT   AT                         
            MARKETS             1048 CET            
                      Latest    Previous  Daily     Change
                      bid       close     change    in 2019
 Czech      <EURCZK=   25.6660   25.6700    +0.02%    +0.16%
 crown      >                                       
 Hungary    <EURHUF=  319.1700  319.7000    +0.17%    +0.60%
 forint     >                                       
 Polish     <EURPLN=    4.2742    4.2739    -0.01%    +0.36%
 zloty      >                                       
 Romanian   <EURRON=    4.7595    4.7580    -0.03%    -2.22%
 leu        >                                       
 Croatian   <EURHRK=    7.4380    7.4363    -0.02%    -0.38%
 kuna       >                                       
 Serbian    <EURRSD=  117.8800  117.9100    +0.03%    +0.36%
 dinar      >                                       
 Note:      calculated from               1800 CET          
                      Latest    Previous  Daily     Change
                                close     change    in 2019
 Prague                1097.62  1095.900    +0.16%   +11.26%
 Budapest             42867.21  42826.30    +0.10%    +9.53%
 Warsaw                2389.78   2372.18    +0.74%    +4.97%
 Bucharest             8255.84   8247.58    +0.10%   +11.81%
 Ljubljana  <.SBITOP    882.78    879.45    +0.38%    +9.76%
 Zagreb                1808.78   1806.24    +0.14%    +3.43%
 Belgrade   <.BELEX1    746.69    739.31    +1.00%    -1.97%
 Sofia                  575.50    575.65    -0.03%    -3.19%
                      Yield     Yield     Spread    Daily
                      (bid)     change    vs Bund   change
 Czech                                              spread
   2-year   <CZ2YT=R    1.7200   -0.1050   +230bps    -10bps
   5-year   <CZ5YT=R    1.7170    0.0470   +207bps     +3bps
   10-year  <CZ10YT=    1.8640    0.0100   +178bps     -2bps
   2-year   <PL2YT=R    1.6060   -0.1100   +219bps    -11bps
   5-year   <PL5YT=R    2.2240    0.0100   +258bps     -1bps
   10-year  <PL10YT=    2.8950    0.0220   +281bps     +0bps
            FORWARD   RATE      AGREEMEN                    
                      3x6       6x9       9x12      3M
 Czech Rep                2.16      2.20      2.19      2.02
 Hungary                  0.37      0.52      0.71      0.16
 Poland                   1.75      1.75      1.76      1.72
 Note: FRA  are for ask prices                              
0 : 0
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