September 16, 2019 / 9:28 AM / 9 months ago

CEE MARKETS-FX down, waiting on Fed, econ data after Saudi attacks

    PRAGUE, Sept 16 (Reuters) - Central European currencies edged lower on Monday with markets
cautious after global oil prices spiked following attacks on crude facilities in Saudi Arabia,
although losses were limited with expectations the region's growth and rates can add support.
    Global markets got some relief in early trading on Monday after the weekend attacks when oil
producer Saudi Aramco assured some clients there would be no shortage in supplies. But
international benchmark Brent crude was still up 8%.
    The Hungarian forint lost up to 0.3% and was bid at 331.90 to the euro by 0852
GMT, leading the region's losses, but the battered currency stayed well off a record low of
333.46 hit last week.
    The Czech crown, Polish zloty and Romania's leu dipped around
    Stock markets in the region were mixed, with Warsaw's blue-chip WIG20 down 0.4%
while Prague was propped up by gains for its biggest stocks CEZ and dual-listed Erste
Group Bank.
    Analysts said the region was buoyed by a steady euro/dollar and investors were looking ahead
to a U.S. Federal Reserve meeting this week where policymakers look likely to cut interest rates
again amid escalating global trade tensions. 
    Further Fed easing would follow a European Central Bank rate cut last week and new stimulus
measures. With central Europe's rate setters in wait-and-see mode thanks to economies still
outpacing the euro zone due to strong domestic demand, analysts say the expected Fed action
would give a boost to currencies this week via a weaker dollar. 
    "(The region's currencies) should be rather stable," said Jan Vejmelek, chief economist and
head of research at Komercni Banka. "Interest rate differentials can be a key driver."
    "The region is still doing quite well (in its economies)," he added.
    Poland, the region's biggest economy, sees a string of data releases this week, starting
with net inflation data on Monday. 
    PKO analysts said other releases will continue to point to a good consumer mood.
    "Monday data will indicate a stabilisation (or even perhaps acceleration) of core inflation
in August, showing that costs and demand pressure together is increasingly affecting domestic
price growth," PKO said.
    Polish 10-year bond yields were bid 9 basis points up.

                                CEE MARKETS        SNAPSHOT    AT                        
                                                                 1052 CET                
                                                   Latest      Previous        Daily     Change
                                                   bid         close           change    in 2019
 EURCZK=    Czech crown                            25.8550     25.8400         -0.06%    -0.57%
 EURHUF=    Hungary forint                         331.9000    331.0050        -0.27%    -3.26%
 EURPLN=    Polish zloty                           4.3248      4.3187          -0.14%    -0.81%
 EURRON=    Romanian leu                           4.7375      4.7343          -0.07%    -1.76%
 EURHRK=    Croatian kuna                          7.3960      7.3933          -0.04%    +0.19%
 EURRSD=    Serbian dinar                          117.6200    117.6000        -0.02%    +0.58%
            Note: daily change  calculated from                                1800 CET  
                                                   Latest      Previous        Daily     Change
                                                               close           change    in 2019
 .PX        Prague                                 1052.97     1050.1700       +0.27%    +6.73%
 .BUX       Budapest                               40373.22    40285.21        +0.22%    +3.15%
 .WIG20     Warsaw                                 2191.58     2200.95         -0.43%    -3.74%
 .BETI      Bucharest                              9263.02     9231.85         +0.34%    +25.45%
 .SBITOP    Ljubljana                              856.69      856.02          +0.08%    +6.52%
 .CRBEX     Zagreb                                 1885.33     1883.68         +0.09%    +7.81%
 .BELEX15   Belgrade                               757.54      758.47          -0.12%    -0.54%
 .SOFIX     Sofia                                  577.39      578.65          -0.22%    -2.87%
                                                   Yield       Yield           Spread    Daily
                                                   (bid)       change          vs Bund   change in
            Czech Republic                                                               spread
 CZ2YT=RR   2-year                                 1.3380      0.1420          +204bps   +15bps
 CZ5YT=RR   5-year                                 1.1080      -0.0760         +184bps   -7bps
 CZ10YT=RR  10-year                                1.4340      0.0400          +190bps   +6bps
 PL2YT=RR   2-year                                 1.5500      -0.0090         +225bps   -1bps
 PL5YT=RR   5-year                                 1.9030      -0.0050         +263bps   +1bps
 PL10YT=RR  10-year                                2.1560      0.0740          +263bps   +9bps
                                FORWARD            RATE        AGREEMENT                 
                                                   3x6         6x9             9x12      3M interbank
            Czech Rep                              2.16        2.09            2.00      2.14
            Hungary                                0.27        0.33            0.37      0.00
            Poland                                 1.74        1.72            1.71      1.72
            Note: FRA quotes    are for ask prices                                       
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