October 23, 2019 / 9:19 AM / a month ago

CEE MARKETS-FX gives back some gains after recent run

    PRAGUE, Oct 23 (Reuters) - Most Central European currencies
gave back some gains on Wednesday with Brexit jitters hanging
over markets, cutting the risk appetite and limiting space for
continued firming.
    After being beat down in previous months, the Polish zloty
and Hungarian forint have led a rebound in central Europe in
October, putting the currencies on course for their best month
of 2019 at this point.
    But analysts and dealers have said that run could lose steam
and possibly lead to a correction as global risks over trade
wars and Britain's uncertain exit date from the European Union
mix with some local worries and the start of slowing growth.
    On Wednesday, the zloty dipped 0.1% to 4.278 to
the euro and the forint was down a tad at 329.00. The
two currencies have gained 2.2% and 1.7%, respectively, since
the start of October.
    "The room for further (zloty appreciation) ... is probably
small," ING Bank Slanski in Warsaw said. 
    "Markets have already valued the positive course of both the
Brexit negotiations and the U.S.-China trade agreement. The
issue of foreign currency mortgage loans in Poland remains an
unsolved problem, however."
    The EU's top court ruled this month in favour of Polish
consumers in a long running dispute over Swiss franc mortgages,
which analysts warn could impact the market if banks start
selling zlotys for francs to secure their portfolios. Some
analysts, though, have said the risk is small.
    Elsewhere, stocks dipped although Hungary was closed for a
holiday. Romania's leu was steady, with markets still
keeping an eye on talks on the formation of a new government
after a Social Democrat cabinet was toppled two weeks ago. 
    The Czech crown lost 0.1% to the euro. The crown
has also gained this month but mainly in the last week, helped
by the central bank keeping alive a debate on a possible
interest rate hike even as global central banks ease policy.
    It bid at 25.584 to the euro and was 0.5% stronger than its
90-day moving average of 25.72. The central bank's latest
outlook assumes an average exchange rate of 25.2 to the euro in
the fourth quarter.
    "Speculation that a November interest rate hike isn't
entirely unrealistic may be behind (crown) appreciation.
Delaying the threat of an uncontrolled Brexit could create space
for such a step," Komercni Banka said in a note.
    "Our main scenario remains rate stability."
    While risks of an uncontrolled Brexit have fallen, analysts
said, uncertainty prevailed. 
    On Tuesday, British Prime Minister Boris Johnson paused
legislation on his new Brexit deal following a parliamentary
defeat for plans to pass the laws through a rushed timetable. It
is now for the rest of the EU to decide whether a Oct. 31
deadline for Brexit should be pushed back to the end of January.

    
                  CEE      SNAPSH   AT                   
                  MARKETS  OT      1059            
                                   CET             
                           CURREN                        
                           CIES                    
                           Latest  Previo  Daily   Change
                                   us              
                           bid     close   change  in
                                                   2019
 EURCZK  Czech    <EURCZK  25.584  25.562  -0.09%   +0.48
 =       crown    =>            0       0               %
 EURHUF  Hungary  <EURHUF  329.00  328.94  -0.02%  -2.41%
 =       forint   =>           00      00          
 EURPLN  Polish   <EURPLN  4.2781  4.2720  -0.14%   +0.27
 =       zloty    =>                                    %
 EURRON  Romania  <EURRON  4.7605  4.7611   +0.01  -2.24%
 =       n leu    =>                            %  
 EURHRK  Croatia  <EURHRK  7.4400  7.4400   +0.00  -0.40%
 =       n kuna   =>                            %  
 EURRSD  Serbian  <EURRSD  117.51  117.59   +0.07   +0.67
 =       dinar    =>           00      00       %       %
         Note:    calculated from          1800          
         daily                             CET     
         change                                    
                                                         
                           Latest  Previo  Daily   Change
                                   us              
                                   close   change  in
                                                   2019
 .PX     Prague            1053.9  1056.9  -0.28%   +6.83
                                9     200               %
 .BUX    Budapes           41845.  41845.   +0.00   +6.92
         t                     95      95       %       %
 .WIG20  Warsaw   <.WIG20  2202.7  2212.1  -0.42%  -3.24%
                  >             8       5          
 .BETI   Buchare           9619.8  9623.4  -0.04%   +30.2
         st                     6       2              9%
 .SBITO  Ljublja  <.SBITO  868.69  871.23  -0.29%   +8.01
 P       na       P>                                    %
 .CRBEX  Zagreb   <.CRBEX  2005.2  2008.3  -0.15%   +14.6
                  >             7       0              6%
 .BELEX  Belgrad  <.BELEX  745.40  747.37  -0.26%  -2.14%
 15      e        15>                              
 .SOFIX  Sofia    <.SOFIX  563.65  564.22  -0.10%  -5.18%
                  >                                
                           BONDS                         
                           Yield   Yield   Spread  Daily
                           (bid)   change  vs      change
                                           Bund    in
         Czech                                     spread
         Republi                                   
         c                                         
 CZ2YT=           <CZ2YT=  1.2450  -0.054   +191b   -4bps
 RR      2-year   RR>                   0      ps  
 CZ5YT=           <CZ5YT=  1.0810  -0.084   +173b   -6bps
 RR      5-year   RR>                   0      ps  
 CZ10YT           <CZ10YT  1.3910  -0.016   +180b   +2bps
 =RR     10-year  =RR>                  0      ps  
         Poland                                          
 PL2YT=           <PL2YT=  1.4920  0.0230   +216b   +3bps
 RR      2-year   RR>                          ps  
 PL5YT=           <PL5YT=  1.7150  -0.030   +237b   -1bps
 RR      5-year   RR>                   0      ps  
 PL10YT           <PL10YT  1.9590  -0.023   +237b   +2bps
 =RR     10-year  =RR>                  0      ps  
                  FORWARD  RATE    AGREEM                
                                   ENT             
                           3x6     6x9     9x12    3M
                                                   interb
                                                   ank
         Czech    <CZKFRA    2.26    2.23    2.18    2.18
         Rep      ><PRIBO                          
                  R=>                              
         Hungary  <HUFFRA    0.27    0.33    0.31    0.21
                  ><BUBOR                          
                  =>                               
         Poland   <PLNFRA    1.73    1.69    1.66    1.71
                  ><WIBOR                          
                  =>                               
         Note:    are for ask                            
         FRA      prices                           
         quotes                                    
         ****************************************        
         **********************                    
                                                         
 
 (Reporting by Jason Hovet in Prague and Agnieszka Barteczko in
Warsaw;
Editing by Alison Williams)
  
 
 
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