WARSAW, Sept 30 (Reuters) - Central European currencies
strengthened on Monday, at the beginning of a week when a
European Union court ruling could have serious implications for
Poland's financial markets.
The European Court of Justice will rule on Thursday on
whether a bank in Poland broke the law by selling homeowners a
Swiss franc mortgage. The ruling could unleash lawsuits that
wipe out Polish banking profits for years to come.
"We approach the (zloty) supports at 4.37 and basically all
of the most interesting things are ahead of us on Oct. 3, so I
think the market is still in wait-and-see mode," said a
Warsaw-based currency trader. "There is a small wave of optimism
but no major moves."
The Polish zloty was up 0.16% against the euro at
4.374. The Hungarian forint, the region's worst-
performing currency, strengthened 0.15% to 334.6. The Czech
crown gained 0.14% at 25.82.
The forint was following the zloty in the absence of a
strong local story, a Budapest trader said, adding that the
broader direction was likely to be further weakening.
PKO Bank Polski analysts said they expected the zloty to
weaken to 4.45 by the end of the week, saying the worst possible
verdict in the court case had not been priced in.
Late on Friday, Fitch affirmed Poland at "A-" with a stable
outlook, as expected.
The agency pointed to Poland's "diversified economy, EU
membership, strong macroeconomic fundamentals and a sound policy
framework supported by a stable banking sector", but said it
expects the deficit to widen as the government increases social
spending.
Polish bond yields ticked higher across the curve, with the
10-year paper trading 1.4 basis points higher at
2.015%.
"Polish 10Y bond yield reached 2% support level and
we expect the down trend might decelerate in the short
term," Santander Bank Polska analysts said in a note.
"The uncertainty related to the impact of the ECJ verdict on
the Polish banks could weigh on the domestic bonds but the front
end could outperform thanks to the CPI release."
Poland will release flash CPI data on Tuesday, with analysts
expecting year-on-year price growth to slow to 2.75% from 2.9%
in August, according to a Reuters poll.
Czech 10-year yields rose 0.9 basis points to
1.349%
Stocks were mostly lower, with benchmark indices in Warsaw
and Budapest down 0.72% and 0.44% respectively.
CEE SNAPSHOT AT
MARKETS 1112 CET
CURRENCI
ES
Latest Previous Daily Change
bid close change in 2019
Czech 25.8200 25.8550 +0.14% -0.44%
crown
Hungary 334.6000 335.1000 +0.15% -4.04%
forint
Polish 4.3740 4.3810 +0.16% -1.93%
zloty
Romanian 4.7505 4.7539 +0.07% -2.03%
leu
Croatian 7.4100 7.4095 -0.01% +0.00%
kuna
Serbian 117.4000 117.4800 +0.07% +0.77%
dinar
Note: calculated from 1800 CET
daily
change
Latest Previous Daily Change
close change in 2019
Prague 1038.00 1038.450 -0.04% +5.21%
0
Budapest 40712.43 40890.74 -0.44% +4.02%
Warsaw 2170.64 2186.31 -0.72% -4.66%
Bucharest 9606.06 9603.38 +0.03% +30.10%
Ljubljana 855.15 855.86 -0.08% +6.33%
Zagreb 1970.28 1978.73 -0.43% +12.66%
Belgrade <.BELEX15 750.61 755.41 -0.64% -1.45%
>
Sofia 571.60 574.60 -0.52% -3.85%
BONDS
Yield Yield Spread Daily
(bid) change vs Bund change
in
Czech spread
Republic
2-year <CZ2YT=RR 1.2960 0.0560 +205bps +5bps
>
5-year <CZ5YT=RR 1.1020 -0.0890 +189bps -10bps
>
10-year <CZ10YT=R 1.3490 0.0090 +190bps -1bps
R>
Poland
2-year <PL2YT=RR 1.5090 0.0130 +226bps +1bps
>
5-year <PL5YT=RR 1.8080 0.0150 +259bps +1bps
>
10-year <PL10YT=R 2.0150 0.0140 +257bps -1bps
R>
FORWARD RATE AGREEMEN
T
3x6 6x9 9x12 3M
interban
k
Czech Rep < 2.16 2.09 2.13 2.16
PRIBOR=>
Hungary < 0.28 0.33 0.37 0.21
BUBOR=>
Poland < 1.73 1.70 1.67 1.72
WIBOR=>
Note: FRA are for ask prices
quotes
**************************************************
************
(Reporting by Alan Charlish in Warsaw and Marton Dunai in
Budapest)
