September 4, 2019 / 9:14 AM / 12 days ago

CEE MARKETS-Forint leads currencies higher in relief rally as no-deal Brexit fears ease

    By Krisztina  Than
    BUDAPEST, Sept 4 (Reuters) - Central European currencies and
shares rebounded on Wednesday in line with a broad European
relief rally on markets as political developments in Italy and
Britain have eased investors' fears.
    The Hungarian forint jumped half a percent versus
the euro, firming past 330 and away from a record low of 331.85
hit last week, and leading the region's currencies higher. 
    British lawmakers have seized control of the parliamentary
timetable to try to block a no-deal Brexit, giving some hope to
investors fretting about the consequences of Britain leaving the
European Union without any agreement.
    "Yesterday's parliamentary decision reduces the risk of
Britain exiting without a deal, which, if confirmed in today's
political decisions, may support market sentiment," Bank
Millennium said in a note.
    "The EUR/PLN exchange rate fell to 4.35, reaching an
important support, the breaking of which may give space for
further strengthening of the zloty," it added.
    By 0822 GMT the zloty was trading 0.15% higher at
4.3403 versus the euro.
    The region's fast-growing economies have outpaced the euro
zone and August PMI manufacturing surveys on Monday which showed
a pickup in activity had boosted local markets. 
    But economic growth is expected to slow this year and next
over uncertainties ranging from global trade tensions to a
potential disorderly British exit from the EU, which could also
hurt Central Europe by damaging trade relations.
    "This August was the most painful month for emerging market
investors for some time," analysts at Raiffeisen said in a note.
    "That being said, central bank actions in September could
help to stabilise the situation. For CEE, the ECB plays an
important role in this respect."
    Interest rate cuts and a potential relaunch of quantitative
easing by the ECB could support Central European currencies,
Raiffeisen added.
     The ECB is expected to cut its deposit rate next week and
announce a restart of its asset purchase programme, but more
than 80% of economists polled by Reuters were sceptical about
the bank's ability to influence inflation over the medium term.
 
                    CEE       SNAPSHO   AT                      
                    MARKETS   T        1022              
                                       CET               
                              CURRENC                           
                              IES                        
                              Latest   Previou  Daily    Change
                                       s                 
                              bid      close    change   in 2019
 EURCZK=  Czech     <EURCZK=  25.8050  25.8330   +0.11%   -0.38%
          crown     >                                    
 EURHUF=  Hungary   <EURHUF=  328.600  330.200   +0.49%   -2.29%
          forint    >               0        0           
 EURPLN=  Polish    <EURPLN=   4.3403   4.3470   +0.15%   -1.17%
          zloty     >                                    
 EURRON=  Romanian  <EURRON=   4.7295   4.7280   -0.03%   -1.60%
          leu       >                                    
 EURHRK=  Croatian  <EURHRK=   7.4065   7.4045   -0.03%   +0.05%
          kuna      >                                    
 EURRSD=  Serbian   <EURRSD=  117.410  117.600   +0.16%   +0.76%
          dinar     >               0        0           
          Note:     calculated from             1800            
          daily                                 CET      
          change                                         
                                                                
                              Latest   Previou  Daily    Change
                                       s                 
                                       close    change   in 2019
 .PX      Prague              1030.23  1030.39   -0.02%   +4.43%
                                            00           
 .BUX     Budapest            39639.0  39405.1   +0.59%   +1.28%
                                    7        9           
 .WIG20   Warsaw              2130.78  2107.16   +1.12%   -6.41%
 .BETI    Buchares            9250.58  9245.71   +0.05%   +25.28
          t                                                    %
 .SBITOP  Ljubljan  <.SBITOP   852.80   852.06   +0.09%   +6.04%
          a         >                                    
 .CRBEX   Zagreb              1867.73  1868.16   -0.02%   +6.80%
 .BELEX1  Belgrade  <.BELEX1   747.11   743.15   +0.53%   -1.91%
 5                  5>                                   
 .SOFIX   Sofia                569.84   571.80   -0.34%   -4.14%
                              BONDS                             
                              Yield    Yield    Spread   Daily
                              (bid)    change   vs Bund  change
                                                         in
          Czech                                          spread
          Republic                                       
 CZ2YT=R    2-year  <CZ2YT=R   1.1490   0.0200   +205bp    +3bps
 R                  R>                                s  
 CZ5YT=R    5-year  <CZ5YT=R   0.8480   0.0070   +178bp    +0bps
 R                  R>                                s  
 CZ10YT=            <CZ10YT=   1.0600   0.0240   +174bp    -1bps
 RR       10-year   RR>                               s  
          Poland                                                
 PL2YT=R    2-year  <PL2YT=R   1.5640   0.0110   +247bp    +2bps
 R                  R>                                s  
 PL5YT=R    5-year  <PL5YT=R   1.7110   0.0290   +264bp    +2bps
 R                  R>                                s  
 PL10YT=            <PL10YT=   1.8570   0.0380   +254bp    +1bps
 RR       10-year   RR>                               s  
                    FORWARD   RATE     AGREEME                  
                                       NT                
                              3x6      6x9      9x12     3M
                                                         interba
                                                         nk
          Czech                  2.08     1.91     1.72     2.14
          Rep       <PRIBOR=                             
                    >                                    
          Hungary                0.31     0.36     0.41     0.26
                                                         
          Poland                 1.72     1.69     1.63     1.72
                                                         
          Note:     are for ask                                 
          FRA       prices                               
          quotes                                         
 
 (Reporting by Jason Hovet in Prague, Krisztina Than in Budapest
and Alan Charlish in Warsaw; Editing by Peter Graff)
  
 
 
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