November 20, 2019 / 11:55 AM / 15 days ago

CEE MARKETS-Forint softens on cenbank rate stance, stocks down

    By Radu-Sorin Marinas
    BUCHAREST, Nov 20 (Reuters) - Hungary's forint traded softer
on Wednesday after the central bank kept interest rates
unchanged the previous day, ignoring a rise in inflation to near
the top of its target range.
    Central Europe's worst-performing currency with a 3.7% loss
versus the euro in 2019, the forint reversed its late-October
rally earlier this month, and was again trading within sight of
its record lows at 336 per euro hit on Sept. 27.
    At 1110 GMT, the unit traded at 333.3 to the euro,
down 0.2 % on the day. 
    "Combined with the recent weakness of the forint and the
MNB's emphasis on data-dependent policy making, we continue to
think the MNB (National Bank of Hungary) is unlikely to ease
further in the December meeting," Goldman Sachs analysts said.
    "However, given the MNB's view that risks remain skewed to
the downside, it suggests that risks to monetary policy are also
skewed towards further easing," they added in a note.
    Other central European currencies were also softer, with the
Polish zloty easing 0.17% and the Romanian leu
 edging down 0.1%.
    The Czech crown was up 0.16%, with a Prague-based
dealer seeing lower liquidity as helping gains as the unit
settles into a range between 25.500-25.600, with players waiting
for further clues on interest rates.
    The Czech central bank is rare in Europe in still debating
whether policy tightening is needed to fight domestic
inflationary pressures. Most analysts expect rate stability
through 2020.
    Regional stocks mostly fell, mirroring a general mode in
emerging stocks as tensions flared again between Washington and
Beijing, adding uncertainty over whether the two sides can end a
trade dispute that is seen as a key risk to global economic
growth.
    Warsaw led losses with a 1.1% fall, followed by
Prague and Budapest with 0.4% and 0.1%
respectively.
            CEE       SNAPSHO  AT 1210                      
            MARKETS   T        CET                 
                      CURRENC                               
                      IES                          
                      Latest   Previous   Daily    Change
                      bid      close      change   in 2019
 Czech      <EURCZK=  25.5300    25.5750   +0.18%     +0.69%
 crown      >                                      
 Hungary    <EURHUF=  333.180   332.9300   -0.08%     -3.63%
 forint     >               0                      
 Polish     <EURPLN=   4.2945     4.2867   -0.18%     -0.11%
 zloty      >                                      
 Romanian   <EURRON=   4.7780     4.7750   -0.06%     -2.60%
 leu        >                                      
 Croatian   <EURHRK=   7.4420     7.4420   +0.00%     -0.43%
 kuna       >                                      
 Serbian    <EURRSD=  117.390   117.4900   +0.09%     +0.78%
 dinar      >               0                      
 Note:      calculated from               1800              
 daily                                    CET      
 change                                            
                                                            
                      Latest   Previous   Daily    Change
                               close      change   in 2019
 Prague               1076.56  1079.7300   -0.29%     +9.12%
 Budapest             43597.7   43618.78   -0.05%    +11.39%
                            4                      
 Warsaw               2179.22    2207.25   -1.27%     -4.28%
 Bucharest            9713.89    9706.24   +0.08%    +31.56%
 Ljubljana  <.SBITOP   884.78     886.48   -0.19%    +10.01%
            >                                      
 Zagreb               1997.60    1994.41   +0.16%    +14.23%
 Belgrade   <.BELEX1   764.68     766.24   -0.20%     +0.39%
            5>                                     
 Sofia                 553.83     554.40   -0.10%     -6.83%
                      BONDS                                 
                      Yield    Yield      Spread   Daily
                      (bid)    change     vs Bund  change in
 Czech                                             spread
 Republic                                          
   2-year   <CZ2YT=R   1.4140     0.0120   +205bp      +2bps
            R>                                  s  
   5-year   <CZ5YT=R   1.2970     0.0530   +191bp      +7bps
            R>                                  s  
   10-year  <CZ10YT=   1.4770    -0.0260   +185bp      +1bps
            RR>                                 s  
 Poland                                                     
   2-year   <PL2YT=R   1.4000    -0.0160   +204bp      -1bps
            R>                                  s  
   5-year   <PL5YT=R   1.7930    -0.0380   +241bp      -2bps
            R>                                  s  
   10-year  <PL10YT=   2.0640    -0.0310   +244bp      +0bps
            RR>                                 s  
            FORWARD   RATE     AGREEMENT                    
                      3x6      6x9        9x12     3M
                                                   interbank
 Czech Rep               2.25       2.25     2.18       2.18
            <PRIBOR=                               
            >                                      
 Hungary                 0.24       0.30     0.34       0.19
                                                   
 Poland                  1.73       1.70     1.67       1.71
                                                   
 Note: FRA  are for ask                                     
 quotes     prices                                 
 
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