July 26, 2019 / 10:00 AM / 23 days ago

CEE MARKETS-Currencies hold around one-week lows after ECB meeting

    By Joanna Plucinska
    WARSAW, July 26 (Reuters) - Central European currencies
remained around one-week lows on Friday after the previous day's
more positive than expected assessment of the euro zone economy
from European Central Bank Governor Mario Draghi. 
    The euro, the key reference currency in central Europe, hit
a two-month low on Thursday after the ECB opened the door to
further stimulus but then rallied when Draghi told a news
conference the risk of recession remained low.
    The Czech crown eased by 0.01% and the Polish
zloty by 0.08% while Hungary's forint was
down 0.14% at 0848 GMT.  
    However, analysts expect Eastern European currencies to firm
again before next week's U.S. Federal Reserve meeting, where the
central bank is expected to cut interest rates.
    "From next week the zloty may strengthen closer to the Fed
meeting ... probably after this (ECB) disappointment we will be
a bit more careful," said Piotr Poplawski, senior economist at
ING in Poland, referring to expectations that the chances of
monetary easing might be smaller after Draghi's comment. 
    Central banks in the region have adopted a wait-and-see
stance despite higher economic growth and inflation, with loose
global monetary policy having eased pressure on them to act.
    "The decision of the ECB on Thursday, and the expected rate
cut by the Fed next week, helps the Hungarian central bank to
maintain the current ultra-loose monetary conditions that also
keep rates low on household loans," David Nemeth, an analyst at
KH Bank in Budapest, said in a note. 
    Czech central bank Vice-Governor Tomas Nidetzky told Reuters
this week that rate stability was most likely and loosening by
the ECB or Fed would not automatically mean the Czech bank would
have to follow suit.
    Poland's 10-year yield hovered around record-low levels at
1.973% on Thursday. 
    Polish yields have been falling since the beginning of the
year after a drop in global bond yields as market expectations
for rate cuts by leading central banks increased against a
backdrop of weak economic data and concern over a global
slowdown.
    
                   CEE      SNAPSHO   AT                      
                   MARKETS  T        1048              
                                     CET               
                            CURRENC                           
                            IES                        
                            Latest   Previou  Daily    Change
                                     s                 
                            bid      close    change   in 2019
 EURCZK  Czech     <EURCZK  25.5440  25.5410   -0.01%   +0.64%
 =       crown     =>                                  
 EURHUF  Hungary   <EURHUF  326.570  326.125   -0.14%   -1.68%
 =       forint    =>             0        0           
 EURPLN  Polish    <EURPLN   4.2625   4.2590   -0.08%   +0.64%
 =       zloty     =>                                  
 EURRON  Romanian  <EURRON   4.7267   4.7245   -0.05%   -1.54%
 =       leu       =>                                  
 EURHRK  Croatian  <EURHRK   7.3840   7.3850   +0.01%   +0.35%
 =       kuna      =>                                  
 EURRSD  Serbian   <EURRSD  117.620  117.730   +0.09%   +0.58%
 =       dinar     =>             0        0           
         Note:     calculated from            1800            
         daily                                CET      
         change                                        
                                                              
                            Latest   Previou  Daily    Change
                                     s                 
                                     close    change   in 2019
 .PX     Prague             1073.05  1074.02   -0.09%   +8.77%
                                          00           
 .BUX    Budapest           41101.9  41353.6   -0.61%   +5.02%
                                  9        2           
 .WIG20  Warsaw    <.WIG20  2311.35  2310.31   +0.05%   +1.53%
                   >                                   
 .BETI   Buchares           8952.44  8968.90   -0.18%   +21.25
         t                                                   %
 .SBITO  Ljubljan  <.SBITO   869.55   869.06   +0.06%   +8.12%
 P       a         P>                                  
 .CRBEX  Zagreb    <.CRBEX  1926.79  1918.62   +0.43%   +10.18
                   >                                         %
 .BELEX  Belgrade  <.BELEX   736.85   738.72   -0.25%   -3.26%
 15                15>                                 
 .SOFIX  Sofia     <.SOFIX   582.90   580.60   +0.40%   -1.94%
                   >                                   
                            BONDS                             
                            Yield    Yield    Spread   Daily
                            (bid)    change   vs Bund  change
                                                       in
         Czech                                         spread
         Republic                                      
 CZ2YT=    2-year  <CZ2YT=   1.3470   0.0780   +211bp    +8bps
 RR                RR>                              s  
 CZ5YT=    5-year  <CZ5YT=   1.1990   0.0620   +190bp    +6bps
 RR                RR>                              s  
 CZ10YT            <CZ10YT   1.3590   0.0220   +172bp    +3bps
 =RR     10-year   =RR>                             s  
         Poland                                               
 PL2YT=    2-year  <PL2YT=   1.5300  -0.0290   +229bp    -3bps
 RR                RR>                              s  
 PL5YT=    5-year  <PL5YT=   1.7830   0.0470   +249bp    +5bps
 RR                RR>                              s  
 PL10YT            <PL10YT   2.1240   0.0540   +249bp    +6bps
 =RR     10-year   =RR>                             s  
                   FORWARD  RATE     AGREEME                  
                                     NT                
                            3x6      6x9      9x12     3M
                                                       interba
                                                       nk
         Czech     <CZKFRA     2.13     2.03     1.95     2.16
         Rep       ><PRIBO                             
                   R=>                                 
         Hungary   <HUFFRA     0.31     0.37     0.40     0.26
                   ><BUBOR                             
                   =>                                  
         Poland    <PLNFRA     1.74     1.73     1.72     1.72
                   ><WIBOR                             
                   =>                                  
         Note:     are for ask                                
         FRA       prices                              
         quotes                                        
         ********************************************         
         ******************                            
                                                              
 

 (Reporting by Joanna Plucinska, Alicja Ptak, Jason Hovet and
Krisztina Than
Editing by David Goodman)
  
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below