January 16, 2020 / 10:40 AM / a month ago

CEE MARKETS-Czech crown pulls back from 7-year high

    WARSAW, Jan 16 (Reuters) - The Czech crown
retreated from a seven-year high in early trade on Thursday, as
it approached a new resistance level after a blistering start to
the year.
    The crown has been the region's best-performing currency so
far this year, boosted by speculation that rates could rise in
the face of stronger inflation. On Wednesday it hit an intraday
high of 25.056, its strongest in seven years.
    At 0853 GMT the crown was down 0.08% on the day against the
euro at 25.102. A trader said the quick move had attracted some
euro buyers at the current levels.
    Analysts say a break on Wednesday of the crown's previous
high of 25.120 - touched after the central bank ended in 2017 an
intervention regime that had kept the crown artificially weak -
opened space for a possible test of the psychological 25 level.
    "The crown continues to be driven by a wave of falling risk
aversion," CSOB said, adding that its rate differential over the
euro zone was also boosting it, especially amid growing
expectations of possible further Czech rate hikes this year.
    It added, though, that the crown's strength was already
helping to tighten monetary policy, which could lead to rate
stability this year. 
    The Hungarian forint gave up 0.24% to be bid 333.4
against the euro, the Polish zloty slipped 0.10% to
4.2329 while the Romanian leu was little changed at
4.7785.
    A Warsaw-based currency trader attributed the move in the
zloty to profit-taking following a strong run in anticipation of
the signing of the U.S.-China trade deal.
    Stocks were mixed, with Warsaw's WIG 20 up 0.38%,
while Prague's PX index slipped 0.36% and stocks in
Budapest were little changed.
    While the signing of the eagerly awaited Phase 1 trade deal
between the United States and China has provided some relief to
global equity markets, investors remain wary as a number of
issues remain unresolved.
    In Hungary, the debt agency was due to offer 20-year bonds
for the first time as part of a government strategy to lengthen
the maturity of outstanding debt.
    A Budapest fixed income trader said it was difficult to
assess the yield level where the new bond could be sold, but
based on their expectations, the auction yield could be around
3%, looking at the closest maturity benchmark bond, the 15-year
paper. 
    
                   CEE      SNAPSHO   AT                      
                   MARKETS  T        1105              
                                     CET               
                            CURRENC                           
                            IES                        
                            Latest   Previou  Daily    Change
                                     s                 
                            bid      close    change   in 2020
 EURCZK  Czech     <EURCZK  25.1200  25.0985   -0.09%   +1.24%
 =       crown     =>                                  
 EURHUF  Hungary   <EURHUF  333.800  332.975   -0.25%   -0.80%
 =       forint    =>             0        0           
 EURPLN  Polish    <EURPLN   4.2340   4.2295   -0.11%   +0.53%
 =       zloty     =>                                  
 EURRON  Romanian  <EURRON   4.7800   4.7795   -0.01%   +0.17%
 =       leu       =>                                  
 EURHRK  Croatian  <EURHRK   7.4440   7.4440   +0.00%   +0.02%
 =       kuna      =>                                  
 EURRSD  Serbian   <EURRSD  117.490  117.520   +0.03%   +0.07%
 =       dinar     =>             0        0           
         Note:     calculated from            1800            
         daily                                CET      
         change                                        
                                                              
                            Latest   Previou  Daily    Change
                                     s                 
                                     close    change   in 2020
 .PX     Prague             1127.52  1133.09   -0.49%   +1.07%
                                          00           
 .BUX    Budapest           44582.3  44565.0   +0.04%   -3.26%
                                  3        3           
 .WIG20  Warsaw    <.WIG20  2168.40  2165.08   +0.15%   +0.85%
                   >                                   
 .BETI   Buchares           10090.1  10082.0   +0.08%   +1.13%
         t                        0        0           
 .SBITO  Ljubljan  <.SBITO   961.31   973.79   -1.28%   +3.83%
 P       a         P>                                  
 .CRBEX  Zagreb    <.CRBEX  2044.65  2048.45   -0.19%   +1.35%
                   >                                   
 .BELEX  Belgrade  <.BELEX   783.24   803.31   -2.50%   -2.30%
 15                15>                                 
 .SOFIX  Sofia     <.SOFIX   581.26   581.34   -0.01%   +2.31%
                   >                                   
                                                              
                            Yield    Yield    Spread   Daily
                            (bid)    change   vs Bund  change
                                                       in
         Czech                                         spread
         Republic                                      
 CZ2YT=    2-year  <CZ2YT=   1.7520  -0.0160   +235bp    -1bps
 RR                RR>                              s  
 CZ5YT=    5-year  <CZ5YT=   1.5390  -0.0210   +205bp    -1bps
 RR                RR>                              s  
 CZ10YT            <CZ10YT   1.7140  -0.0080   +193bp    +0bps
 =RR     10-year   =RR>                             s  
         Poland                                               
 PL2YT=    2-year  <PL2YT=   1.5150  -0.0040   +211bp    +0bps
 RR                RR>                              s  
 PL5YT=    5-year  <PL5YT=   1.9510   0.0140   +247bp    +2bps
 RR                RR>                              s  
 PL10YT            <PL10YT   2.2570   0.0200   +247bp    +2bps
 =RR     10-year   =RR>                             s  
                   FORWARD                                    
                            3x6      6x9      9x12     3M
                                                       interba
                                                       nk
         Czech     <CZKFRA     2.28     2.28     2.26     2.17
         Rep       ><PRIBO                             
                   R=>                                 
         Hungary   <HUFFRA     0.27     0.38     0.46     0.16
                   ><BUBOR                             
                   =>                                  
         Poland    <PLNFRA     1.75     1.75     1.79     1.71
                   ><WIBOR                             
                   =>                                  
         Note:     are for ask                                
         FRA       prices                              
         quotes                                        
         
0 : 0
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