September 17, 2019 / 9:52 AM / a month ago

CEE MARKETS-Currencies, stocks weaken on geopolitical jitters

    By Krisztina  Than
    BUDAPEST, Sept 17 (Reuters) - Central European currencies
and stocks fell on Tuesday amid geopolitical concerns raised by
attacks on Saudi oil facilities, with Hungary's forint reaching
a record 333.53 against the euro.
    By 0917 GMT, the forint, which has underperformed
its peers in the region this year by easing 3.7%, was down about
0.4%. Other regional currencies were trading 0.1 to 0.2% lower.
    "This weakening today is probably due to the renewed
tensions between the United States and Iran, which has soured
investor sentiment," a dealer in Budapest said.
    The forint was in a weakening trend, she said, and could
test its all-time low soon, since the Hungarian central bank was
not expected to change its dovish stance at next week's meeting.
    "The historical low of 333.45 is the only significant
resistance for the forint ... should the currency ease past this
level, that could bring about further sudden losses," Erste
analysts said in a note.
    On Monday, Gergely Gulyas, Prime Minister Viktor Orban's
chief of staff, told Reuters the government had no exchange rate
target, but the current rate "posed no threat to the success of
Hungarian economic policy."
    The central bank has so far not commented on the forint's
easing, also saying it had no exchange rate target.
    The bank holds its next policy meeting on Sept. 24 when it
will publish its fresh inflation forecasts. Investors will watch
the bank's comments on whether it expects the weaker forint to
boost inflation in the longer run. 
    Unlike with the European Central Bank, which cut rates and
began a new stimulus programme last week, monetary policy-makers
in central Europe remain noncommittal.
    Investors are waiting for a Federal Reserve policy meeting
on Wednesday, which is a widely expected cut to interest rates.
    Most analysts doubt the region's central banks will follow
global central banks' footsteps anytime soon. 
    Czech central bankers Marek Mora and Oldrich Dedek both told
Reuters this week rate they expect rates to remain stable, since
the Czech economy remains resilient in the face of slowdowns
    The Czech central bank's monetary department chief, Petr
Kral, said in a blog post on Tuesday that the bank could raise
interest rates once more in the near future if its baseline
economic forecast scenario is met.
                   CEE      SNAPSHO   AT                      
                   MARKETS  T        1044              
                            Latest   Previou  Daily    Change
                            bid      close    change   in 2019
 EURCZK  Czech     <EURCZK  25.8880  25.8490   -0.15%   -0.70%
 =       crown     =>                                  
 EURHUF  Hungary   <EURHUF  333.240  332.100   -0.34%   -3.65%
 =       forint    =>             0        0           
 EURPLN  Polish    <EURPLN   4.3370   4.3280   -0.21%   -1.09%
 =       zloty     =>                                  
 EURRON  Romanian  <EURRON   4.7360   4.7341   -0.04%   -1.73%
 =       leu       =>                                  
 EURHRK  Croatian  <EURHRK   7.3930   7.3943   +0.02%   +0.23%
 =       kuna      =>                                  
 EURRSD  Serbian   <EURRSD  117.490  117.600   +0.09%   +0.69%
 =       dinar     =>             0        0           
         Note:     calculated from            1800            
         daily                                CET      
                            Latest   Previou  Daily    Change
                                     close    change   in 2019
 .PX     Prague             1058.06  1060.83   -0.26%   +7.25%
 .BUX    Budapest           40575.8  40819.5   -0.60%   +3.67%
                                  6        6           
 .WIG20  Warsaw    <.WIG20  2201.23  2217.84   -0.75%   -3.31%
 .BETI   Buchares           9281.32  9289.26   -0.09%   +25.70
         t                                                   %
 .SBITO  Ljubljan  <.SBITO   854.97   858.87   -0.45%   +6.31%
 P       a         P>                                  
 .CRBEX  Zagreb    <.CRBEX  1892.96  1895.07   -0.11%   +8.24%
 .BELEX  Belgrade  <.BELEX   762.16   757.47   +0.62%   +0.06%
 15                15>                                 
 .SOFIX  Sofia     <.SOFIX   579.70   580.02   -0.06%   -2.48%
                            Yield    Yield    Spread   Daily
                            (bid)    change   vs Bund  change
         Czech                                         spread
 CZ2YT=    2-year  <CZ2YT=   1.3350  -0.0470   +204bp    -5bps
 RR                RR>                              s  
 CZ5YT=    5-year  <CZ5YT=   1.1040  -0.0740   +185bp    -7bps
 RR                RR>                              s  
 CZ10YT            <CZ10YT   1.4040  -0.0220   +190bp    -1bps
 =RR     10-year   =RR>                             s  
 PL2YT=    2-year  <PL2YT=   1.5220  -0.0140   +223bp    -2bps
 RR                RR>                              s  
 PL5YT=    5-year  <PL5YT=   1.8890   0.0080   +263bp    +2bps
 RR                RR>                              s  
 PL10YT            <PL10YT   2.1350   0.0090   +263bp    +3bps
 =RR     10-year   =RR>                             s  
                   FORWARD  RATE     AGREEME                  
                            3x6      6x9      9x12     3M
         Czech     <CZKFRA     2.16     2.09     1.98     2.14
         Rep       ><PRIBO                             
         Hungary   <HUFFRA     0.27     0.33     0.32     0.21
         Poland    <PLNFRA     1.73     1.73     1.72     1.72
         Note:     are for ask                                
         FRA       prices                              

 (Reporting by Robert Muller in Prague, Krisztina Than in
Budapest; editing by Larry King)
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