June 23, 2020 / 1:07 PM / 23 days ago

UPDATE 1-CEE MARKETS-Forint hits 4-week low after surprise rate cut

 (Updates after Hungary rate cut)
    PRAGUE, June 23 (Reuters) - Hungary's forint extended losses
to trade at its lowest level in four weeks on Tuesday after the
country's central bank delivered a surprise 15 basis point cut
to its base rate.   
    The forint traded at 350.70 to the euro at 1217
GMT, recovering a little ground after falling more than 1% to
350.80, its weakest since May 25, just after the central bank
cut its main rate to 0.75%. The move
defied analysts' expectations for steady borrowing costs.
    Other central European currencies, along with stocks, were
firmer on the day with global markets more upbeat after
confusion over the U.S.-China trade pact, which the former said
remained intact.
    Ahead of the meeting, some analysts said weaker growth
projections could lead to a more dovish tone in the Hungarian
central bank's policy statement, something which was already
weighing on the forint in early trade on Tuesday.
    "Many... have been expecting an implicit rate cut or some
kind of easing, but not necessarily a base rate cut," a trader
said. 
    "This means the forint could go back to the range around 355
to the euro in the next few days or weeks and we will go back to
exchange rates between 350 and 360."
    The central bank had taken steps to tighten its loose policy
in April to stabilise the weakening forint and launched a
quantitative easing programme in May to help the coronavirus-hit
economy.
    It will hold an online news conference at 1300 GMT, with the
bank's governor and deputy governors attending. This includes
new deputy governor Barnabas Virag, who replaced Marton Nagy,
the architect of many of the bank's unconventional monetary
easing programmes.
    Elsewhere, the Czech crown edged 0.2% higher
before its own rate meeting on Wednesday. Czech policymakers
will likely leave rates unchanged, analysts said in a poll on
Monday.
    The Polish zloty was up 0.1% and Romania's leu
 was steady.
    On stock markets, Warsaw blue chips led gains,
rising 2.0%.
    
                   CEE      SNAPSHO   AT  1417 CET            
                   MARKETS  T                          
                                                              
                   CURRENCIES                                 
                            Latest   Previou  Daily    Change
                                     s                 
                            bid      close    change   in 2020
 EURCZK  Czech     <EURCZK  26.6100  26.6715   +0.23%   -4.43%
 =       crown     =>                                  
 EURHUF  Hungary   <EURHUF  350.700  347.080   -1.03%   -5.58%
 =       forint    =>             0        0           
 EURPLN  Polish    <EURPLN   4.4375   4.4428   +0.12%   -4.08%
 =       zloty     =>                                  
 EURRON  Romanian  <EURRON   4.8440   4.8422   -0.04%   -1.15%
 =       leu       =>                                  
 EURHRK  Croatian  <EURHRK   7.5750   7.6246   +0.65%   -1.71%
 =       kuna      =>                                  
 EURRSD  Serbian   <EURRSD  117.530  117.580   +0.04%   +0.03%
 =       dinar     =>             0        0           
         Note:     calculated from            1800            
         daily                                CET      
         change                                        
                                                              
                   STOCKS                                     
                            Latest   Previou  Daily    Change
                                     s                 
                                     close    change   in 2020
 .PX     Prague              932.45  927.120   +0.57%  -16.42%
                                           0           
 .BUX    Budapest           37654.2  37193.1   +1.24%  -18.29%
                                  4        1           
 .WIG20  Warsaw    <.WIG20  1832.57  1797.05   +1.98%  -14.77%
                   >                                   
 .BETI   Buchares           8732.62  8683.52   +0.57%  -12.48%
         t                                             
 .SBITO  Ljubljan  <.SBITO   857.94   858.82   -0.10%   -7.34%
 P       a         P>                                  
 .CRBEX  Zagreb    <.CRBEX  1628.82  1640.76   -0.73%  -19.26%
                   >                                   
 .BELEX  Belgrade  <.BELEX   670.87   671.33   -0.07%  -16.32%
 15                15>                                 
 .SOFIX  Sofia     <.SOFIX   455.56   457.22   -0.36%  -19.82%
                   >                                   
                                                              
                   BONDS                                      
                            Yield    Yield    Spread   Daily
                            (bid)    change   vs Bund  change
                                                       in
         Czech Republic                                spread
 CZ2YT=    2-year  <CZ2YT=   0.1250   0.0230   +080bp    +0bps
 RR                RR>                              s  
 CZ5YT=    5-year  <CZ5YT=   0.3260  -0.1510   +098bp   -18bps
 RR                RR>                              s  
 CZ10YT            <CZ10YT   0.8030   0.0180   +122bp    -1bps
 =RR     10-year   =RR>                             s  
         Poland                                               
 PL2YT=    2-year  <PL2YT=   0.1810   0.0080   +085bp    -2bps
 RR                RR>                              s  
 PL5YT=    5-year  <PL5YT=   0.7640   0.0010   +142bp    -2bps
 RR                RR>                              s  
 PL10YT            <PL10YT   1.4030   0.0420   +182bp    +2bps
 =RR     10-year   =RR>                             s  
                                                              
                   FRA                                        
                            3x6      6x9      9x12     3M
                                                       interba
                                                       nk
         Czech     <CZKFRA     0.31     0.31     0.33     0.34
         Rep       ><PRIBO                             
                   R=>                                 
         Hungary   <HUFFRA     0.64     0.60     0.54     0.88
                   ><BUBOR                             
                   =>                                  
         Poland    <PLNFRA     0.23     0.23     0.24     0.27
                   ><WIBOR                             
                   =>                                  
         Note: FRA quotes are for ask prices                  
         
0 : 0
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