September 3, 2019 / 9:48 AM / 5 months ago

CEE MARKETS-Hungarian forint hits 18-year low against dollar as currencies suffer

    * FX lose ground against main reference euro currency
    * Currencies at multi-year lows against dollar
    * Stocks lose, Warsaw snaps winning streak sparked by low
    * Czech O2 shares gain as buyback news boosts support

    PRAGUE, Sept 3 (Reuters) - Central European currencies
touched new lows against the dollar and edged lower against the
euro on Tuesday, while stock markets also fell as Brexit cast a
shadow over economic bright spots.
    Economies in the region have outpaced the euro zone and
manufacturing surveys showing slight improvements on Monday had
boosted markets. 
    But the export-reliant region is expected to slow in the
coming quarters over uncertainties ranging from global trade
tensions to a potential disorderly British exit from the
European Union.
    The latter could hurt the region by damaging trade both
directly with Britain and, more importantly, indirectly as
suppliers to bigger economies like Germany that count on the
British market for exports.
    On Tuesday, British lawmakers prepared to vote on the first
stage of a plan to block Prime Minister Boris Johnson from
pursuing a no-deal Brexit, fuelling market jitters.
    A sharply falling euro - the region's main reference
currency - against the dollar translated into further losses for
Central European currencies against the U.S. currency, with the
Hungarian forint hitting an 18-year low of 302.99 to the
    The Czech crown and Polish zloty were also
at more than two-year lows against the dollar.
    Versus the euro, the zloty fell 0.1% to 4.365 to
lead losses, while the forint and the crown
ticked lower after slight gains on Monday. 
    "The crown is still under pressure because of uncertainty
connected to Brexit," Czech bank CSOB said. It added industry
and retail data this week could help buoy the currency.
    Czech wage data on Tuesday showed still strong growth,
rising a real 4.3% and nominal 7.2%, above forecasts. 
    Analysts said this was another reason the central bank -
which halted a tightening cycle in May just as global central
banks shifted to an easing bias - would remain in wait-and-see
mode with rates.
    Investors are also focused on the European Central Bank's
meeting next week, expecting policymakers to loosen monetary
    "Until then, trading volatility may be limited," Poland's
Bank Millennium said.
    In stock markets, Warsaw's blue-chip index lost
1.9%, snapping a three-day win streak that started after it
touched a 2-1/2 year low last week.
    Telecom group O2 Czech Republic rose up to 1%,
gaining for a second straight session after news the company was
again in the market last week as part of a buyback programme,
making its first purchases since the end of 2017.  
    Its shares have traded since June at their lowest since
                   CEE      SNAPSHO   AT                      
                   MARKETS  T        1059              
                            Latest   Previou  Daily    Change
                            bid      close    change   in 2019
 EURCZK  Czech     <EURCZK  25.9000  25.8910   -0.03%   -0.75%
 =       crown     =>                                  
 EURHUF  Hungary   <EURHUF  331.100  331.050   -0.02%   -3.02%
 =       forint    =>             0        0           
 EURPLN  Polish    <EURPLN   4.3654   4.3609   -0.10%   -1.74%
 =       zloty     =>                                  
 EURRON  Romanian  <EURRON   4.7248   4.7243   -0.01%   -1.50%
 =       leu       =>                                  
 EURHRK  Croatian  <EURHRK   7.4050   7.4030   -0.03%   +0.07%
 =       kuna      =>                                  
 EURRSD  Serbian   <EURRSD  117.450  117.510   +0.05%   +0.72%
 =       dinar     =>             0        0           
         Note:     calculated from            1800            
         daily                                CET      
                            Latest   Previou  Daily    Change
                                     close    change   in 2019
 .PX     Prague             1031.50  1036.45   -0.48%   +4.56%
 .BUX    Budapest           39181.1  39707.4   -1.33%   +0.11%
                                  0        3           
 .WIG20  Warsaw    <.WIG20  2103.82  2144.48   -1.90%   -7.59%
 .BETI   Buchares           9248.59  9259.73   -0.12%   +25.26
         t                                                   %
 .SBITO  Ljubljan  <.SBITO   852.68   850.37   +0.27%   +6.02%
 P       a         P>                                  
 .CRBEX  Zagreb    <.CRBEX  1865.11  1865.99   -0.05%   +6.65%
 .BELEX  Belgrade  <.BELEX   742.80   746.36   -0.48%   -2.48%
 15                15>                                 
 .SOFIX  Sofia     <.SOFIX   568.97   569.92   -0.17%   -4.29%
                            Yield    Yield    Spread   Daily
                            (bid)    change   vs Bund  change
         Czech                                         spread
 CZ2YT=    2-year  <CZ2YT=   1.1430   0.0300   +207bp    +4bps
 RR                RR>                              s  
 CZ5YT=    5-year  <CZ5YT=   0.8540   0.0060   +182bp    +2bps
 RR                RR>                              s  
 CZ10YT            <CZ10YT   1.0390  -0.0210   +177bp    +1bps
 =RR     10-year   =RR>                             s  
 PL2YT=    2-year  <PL2YT=   1.5410  -0.0210   +247bp    -1bps
 RR                RR>                              s  
 PL5YT=    5-year  <PL5YT=   1.6440  -0.0620   +261bp    -5bps
 RR                RR>                              s  
 PL10YT            <PL10YT   1.8100  -0.0440   +255bp    -1bps
 =RR     10-year   =RR>                             s  
                   FORWARD  RATE     AGREEME                  
                            3x6      6x9      9x12     3M
         Czech     <CZKFRA     2.08     1.91     1.75     2.14
         Rep       ><PRIBO                             
         Hungary   <HUFFRA     0.31     0.31     0.32     0.00
         Poland    <PLNFRA     1.74     1.69     1.62     1.72
         Note:     are for ask                                
         FRA       prices                              
0 : 0
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