May 7, 2020 / 9:58 AM / a month ago

CEE MARKETS-FX edges up on euro recovery, Czechs set to cut rate

    By Radu-Sorin Marinas
    BUDAPEST, May 7 (Reuters) - Central European currencies
edged up early on Thursday, mirroring a recovery of the euro,
with the Czech crown likely to see little effect from an
expected rate cut later in the day by the Czech central bank.
    The euro inched up after three days of losses, but traders
remained cautious amid concern over the European Central Bank's
stimulus scheme following a German court ruling this week.
 The euro zone is Central Europe's main trading
partner.
    By 0920 GMT, the Czech crown had gained 0.2% to
trade at about 27.09 per euro. The Polish zloty and
the Hungarian forint were 0.1% up on the day. The
Romanian leu was flat.
    "As today's step (by the Czech National Bank) is likely to
be largely priced in, the effects on the crown are likely to be
limited," analysts at Commerzbank said.
    "The CNB is likely to keep all doors open, with everyone
likely to pay close attention to what it might have to say
regarding the extended possibilities for asset purchases."
    The CNB cut rates by 125 basis points in two moves in March
to bring the key rate to 1.00%, reversing more than
two years of tightening.
    Some central bankers have talked about the CNB being able to
eventually cut to technical zero - a level of 0.05% that it
maintained in 2012-2017 as part of an ultra-loose policy.
    The Czech parliament approved a bill last month granting the
monetary authority wider powers to buy assets in financial
markets, although the bank has said it does not plan to use its
new powers at the moment.   
    Regional stocks rose in line with other emerging markets
after stronger-than-expected Chinese export numbers boosted
hopes China can rebound quickly and help revive global growth in
the aftermath of coronavirus-related shocks.
    Prague led regional stocks higher together with
Bucharest's with a 0.7% increase, followed by Warsaw
 with 0.6%. Budapest was down 0.2%.
    
            CEE        SNAPSHOT     AT                         
            MARKETS                1220 CET           
                       CURRENCIES                              
                       Latest      Previous  Daily    Change
                       bid         close     change   in 2020
 Czech                    27.0910   27.1320   +0.15%     -6.12%
 crown                                                
 Hungary                 350.6000  351.0000   +0.11%     -5.55%
 forint                                               
 Polish                    4.5494    4.5557   +0.14%     -6.44%
 zloty                                                
 Romanian                  4.8265    4.8280   +0.03%     -0.79%
 leu                                                  
 Croatian                  7.5660    7.5673   +0.02%     -1.59%
 kuna                                                 
 Serbian                 117.4700  117.5700   +0.09%     +0.09%
 dinar                                                
 Note:      calculated from                  1800              
 daily                                       CET      
 change                                               
                                                               
                       Latest      Previous  Daily    Change
                                   close     change   in 2020
 Prague                    879.49  872.7100   +0.78%    -21.17%
 Budapest                34407.80  34557.17   -0.23%    -25.33%
 Warsaw                   1575.96   1567.98   +0.51%    -26.70%
 Bucharest                8161.52   8106.93   +0.67%    -18.20%
 Ljubljana                 796.57    797.83   -0.16%    -13.96%
 Zagreb                   1532.58   1538.99   -0.42%    -24.03%
 Belgrade   <.BELEX15      662.02    664.54   -0.38%    -17.42%
            >                                         
 Sofia                     445.13    448.37   -0.72%    -21.65%
                                                               
                       Yield       Yield     Spread   Daily
                       (bid)       change    vs Bund  change in
 Czech                                                spread
 Republic                                             
   2-year   <CZ2YT=RR      0.5320    0.0080   +127bp      +0bps
            >                                      s  
   5-year   <CZ5YT=RR      0.7320    0.0010   +145bp      +0bps
            >                                      s  
   10-year  <CZ10YT=R      1.1430   -0.1320   +165bp     -13bps
            R>                                     s  
 Poland                                                        
   2-year   <PL2YT=RR      0.5540    0.0130   +129bp      +1bps
            >                                      s  
   5-year   <PL5YT=RR      1.0870    0.0290   +180bp      +3bps
            >                                      s  
   10-year  <PL10YT=R      1.5670    0.0030   +207bp      +0bps
            R>                                     s  
            FORWARD                                            
                       3x6         6x9       9x12     3M
                                                      interbank
 Czech Rep          <        0.30      0.30     0.31       0.89
            PRIBOR=>                                  
 Hungary            <        1.17      1.12     1.08       1.08
            BUBOR=>                                   
 Poland             <        0.34      0.34     0.36       0.68
            WIBOR=>                                   
 Note: FRA  are for ask prices                                 
 quotes                                               
 ***************************************************           
 ***********                                          
 

 (Additional reporting by Anita Komuves in Budapest, Jason Hovet
in Prague, Alan Charlish in Warsaw; editing by Larry King)
  
 
 
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