February 14, 2020 / 11:51 AM / 7 days ago

CEE MARKETS-Forint paces FX gains on robust GDP, cbank verbal intervention

    By Anita Komuves
    Feb 14 (Reuters) - The Hungarian forint paced
regional gains on Friday morning, reacting to robust GDP growth
and verbal intervention from the National Bank of Hungary
against recent marked currency weakening.
    The forint was bid at 335.25 against the euro, 0.7% stronger
on the day, after hitting a record low of 340.31 on Wednesday.
    "Both markets and analysts consider remarks by the central
bank deputy governor as hawkish. But the words of the NBH will
have to be followed by action," a dealer in Budapest said. 
    Dealers said markets paid close attention to NBH deputy
governor Marton Nagy's remarks, which were delivered to
investors in London earlier on Friday. Reuters confirmed the
investor call took place but not what Nagy told participants.
    The National Bank of Hungary (NBH) is the most dovish in the
region and has kept its benchmark rate at a record low of 0.9%
since 2016.
    Hungary's economic growth slowed to an annual
4.5% in the fourth quarter from 5.0% in the third quarter,
matching analyst forecasts and hitting its slowest in almost two
years, preliminary unadjusted data showed on Friday.

    Hungary's government expects economic growth at 3.5% this
year, below its previous 4% forecast, Finance Minister Mihaly
Varga said on Friday. 
    He added that recent falls in the forint were broadly
neutral for the government budget and reiterated his view that
Hungary needed a stable and predictable exchange rate.

    "Despite the global and European slowdown the Hungarian
economy is still growing, and that strengthens the forint," a
dealer in Budapest said.
    The Czech crown gained a third of a percent to its
strongest since October 2012 after inflation grew at its fastest
pace in almost eight years. The Czech central bank surprised
markets with a rate hike last week.
    The forint's gains also helped the crown's gains as well as
other regional units, a dealer said. 
    The Czech economy expanded by an annual 1.7% in the fourth
quarter, below expectations for 1.9% in a Reuters poll, marking
the slowest pace in six years. 
    The Polish stock market and the zloty
both traded flat after inflation rose faster than expected in
January, reaching 4.4% year-on-year, a nine-year high, after a
3.4% reading in December.
    
  ** For an interactive graphic on GDP: tmsnrt.rs/2qMFUkq
    
    
                    CEE       SNAPSHO   AT                      
                    MARKETS   T        1049              
                                       CET               
                              CURRENC                           
                              IES                        
                              Latest   Previou  Daily    Change
                                       s                 
                              bid      close    change   in 2020
 EURCZK=  Czech     <EURCZK=  24.7900  24.8805   +0.37%   +2.59%
          crown     >                                    
 EURHUF=  Hungary   <EURHUF=  335.250  337.700   +0.73%   -1.22%
          forint    >               0        0           
 EURPLN=  Polish    <EURPLN=   4.2395   4.2466   +0.17%   +0.40%
          zloty     >                                    
 EURRON=  Romanian  <EURRON=   4.7675   4.7651   -0.05%   +0.44%
          leu       >                                    
 EURHRK=  Croatian  <EURHRK=   7.4490   7.4493   +0.00%   -0.05%
          kuna      >                                    
 EURRSD=  Serbian   <EURRSD=  117.560  117.560   +0.00%   +0.01%
          dinar     >               0        0           
          Note:     calculated from             1800            
          daily                                 CET      
          change                                         
                                                                
                              Latest   Previou  Daily    Change
                                       s                 
                                       close    change   in 2020
 .PX      Prague              1101.66  1104.10   -0.22%   -1.25%
                                            00           
 .BUX     Budapest            44947.7  44629.5   +0.71%   -2.46%
                                    1        1           
 .WIG20   Warsaw              2121.38  2120.07   +0.06%   -1.34%
 .BETI    Buchares            10091.5  10095.9   -0.04%   +1.15%
          t                         8        9           
 .SBITOP  Ljubljan  <.SBITOP   980.91   977.64   +0.33%   +5.95%
          a         >                                    
 .CRBEX   Zagreb              2027.51  2029.20   -0.08%   +0.50%
 .BELEX1  Belgrade  <.BELEX1   815.18   816.52   -0.16%   +1.68%
 5                  5>                                   
 .SOFIX   Sofia                562.91   563.46   -0.10%   -0.92%
                                                                
                              Yield    Yield    Spread   Daily
                              (bid)    change   vs Bund  change
                                                         in
          Czech                                          spread
          Republic                                       
 CZ2YT=R    2-year  <CZ2YT=R   1.9690   0.1940   +262bp   +20bps
 R                  R>                                s  
 CZ5YT=R    5-year  <CZ5YT=R   1.6220  -0.0130   +223bp    +0bps
 R                  R>                                s  
 CZ10YT=            <CZ10YT=   1.5790   0.0630   +198bp    +7bps
 RR       10-year   RR>                               s  
          Poland                                                
 PL2YT=R    2-year  <PL2YT=R   1.6050  -0.0190   +225bp    -2bps
 R                  R>                                s  
 PL5YT=R    5-year  <PL5YT=R   1.8390  -0.0270   +245bp    -2bps
 R                  R>                                s  
 PL10YT=            <PL10YT=   2.1870  -0.0380   +259bp    -3bps
 RR       10-year   RR>                               s  
                    FORWARD                                     
                              3x6      6x9      9x12     3M
                                                         interba
                                                         nk
          Czech                  2.37     2.31     2.27     2.39
          Rep       <PRIBOR=                             
                    >                                    
          Hungary                0.76     0.90     1.01     0.42
                                                         
          Poland                 1.73     1.74     1.73     1.71
                                                         
          Note:     are for ask                                 
          FRA       prices                               
          quotes                                         
          *********************************************         
          *****************                              
 


    
 (Additional reporting by Jason Hovet in Prague and Alan
Charlish in Warsaw; Editing by Maju Samuel)
  
 
 
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