December 30, 2019 / 11:04 AM / 20 days ago

CEE MARKETS-Forint on course for 3% loss in 2019, crown headed for gains

    * Forint, leu worst-hit among CEE FX in 2019
    * Crown, zloty cement 2019 gains
    * Poll sees few gains, some losses in 2020
    * Stocks mostly ending 2019 with strong gains

    By Jason Hovet
    PRAGUE, Dec 30 (Reuters) - The Czech crown firmed against
the euro on Monday to put it on course for a 1% gain in 2019
while central Europe's worst-hit currency this year, the
Hungarian forint, fell slightly to set it up for a 3% full-year
loss.
    Central Europe's currencies have been mostly weighed under
for much of 2019 by risks to trade coming from a U.S.-China
dispute and worries over Britain's European Union exit.
    Analysts so far expect few gains in 2020, with risks
remaining and economies in the region slowing, according to a
Reuters poll in early December.
    The crown has been the best performing, rising mostly in the
final quarter of the year as the central bank debated the
potential need for rate hikes -- although it left
policy unchanged -- and as global risks eased somewhat.
    On the other end, the forint has stayed under pressure as
Hungary's central bank kept the loosest policy in the region. 
    On the last full trading day of 2019, trends largely stayed
in place, with the forint edging down 0.05% to 330.56
to the euro by 1015 GMT. It had hit a record low 337.21 in
November.
    The crown gained 0.2% to 25.455 to the euro, off
its 2019 high of 25.405.
    Analysts from Czech bank CSOB said currencies' movement will
depend on how the "global weather" develops next year.
    "We believe 2020 will rather mean a 'soft landing' rather
than any deepening of economic problems," they said in a note.
    "On the other hand today's prices are already practically
counting on that and a number of risks and uncertainties... can
return into play like a boomerang."
    They added growth will be slower than in previous years and
global growth will be at one of the slowest paces in the last
decade.
    
    
    
    
    
    
    Elsewhere, the Polish zloty, which is also set to
end the year in positive territory, inched up less than 0.1% to
4.258 per euro. 
    Romania's leu was flat at 4.783 to the euro. Like
the forint, it has been under pressure in 2019 due to worries
over its budget deficit after a government change in the autumn.
    On stock markets, indexes largely moved higher. Except for
Warsaw's blue-chip WIG20, stock markets have posted
double-digit gains this year.
    In Hungary, whose BUX is up over 17% since the start
of the year, oil and gas group MOL shares were
unmoved.
    Earlier, a Croatian court ruled MOL's head and Croatia's
former prime minister were guilty in a corruption case, opening
a new chapter in a legal saga that has been dragging on for
almost a decade.
    Bond yields in the region also moved higher.
    
                                CEE MARKETS        SNAPSHOT    AT                        
                                                                 1115 CET                
                                                   CURRENCIES                            
                                                   Latest      Previous        Daily     Change
                                                   bid         close           change    in 2019
 EURCZK=    Czech crown                            25.4550     25.5140         +0.23%    +0.99%
 EURHUF=    Hungary forint                         330.5600    330.5650        +0.00%    -2.87%
 EURPLN=    Polish zloty                           4.2580      4.2598          +0.04%    +0.74%
 EURRON=    Romanian leu                           4.7830      4.7840          +0.02%    -2.70%
 EURHRK=    Croatian kuna                          7.4495      7.4450          -0.06%    -0.53%
 EURRSD=    Serbian dinar                          117.4500    117.5500        +0.09%    +0.72%
            Note: daily change  calculated from                                1800 CET  
                                                                                         
                                                   Latest      Previous        Daily     Change
                                                               close           change    in 2019
 .PX        Prague                                 1115.60     1119.3300       -0.33%    +13.08%
 .BUX       Budapest                               46021.79    45984.46        +0.08%    +17.59%
 .WIG20     Warsaw                                 2156.41     2151.74         +0.22%    -5.28%
 .BETI      Bucharest                              9959.58     9948.53         +0.11%    +34.89%
 .SBITOP    Ljubljana                              927.59      924.84          +0.30%    +15.33%
 .CRBEX     Zagreb                                 2024.66     2022.31         +0.12%    +15.77%
 .BELEX15   Belgrade                               791.62      780.69          +1.40%    +3.93%
 .SOFIX     Sofia                                  562.12      561.73          +0.07%    -5.44%
                                                   BONDS                                 
                                                   Yield       Yield           Spread    Daily
                                                   (bid)       change          vs Bund   change in
            Czech Republic                                                               spread
 CZ2YT=RR   2-year                                 1.6960      0.0610          +231bps   +4bps
 CZ5YT=RR   5-year                                 1.4260      0.0210          +191bps   -2bps
 CZ10YT=RR  10-year                                1.6320      0.0160          +184bps   -4bps
            Poland                                                                       
 PL2YT=RR   2-year                                 1.4770      0.0140          +209bps   -1bps
 PL5YT=RR   5-year                                 1.8160      0.0210          +230bps   -2bps
 PL10YT=RR  10-year                                2.1130      0.0210          +232bps   -3bps
                                FORWARD            RATE        AGREEMENT                 
                                                   3x6         6x9             9x12      3M interbank
            Czech Rep                              2.28        2.28            2.30      2.18
            Hungary                                0.31        0.37            0.45      0.16
            Poland                                 1.72        1.71            1.70      1.71
            Note: FRA quotes    are for ask prices                                       
            **************************************************************
                                                                                         
 
    
 (Reporting by Jason Hovet in Prague, Alan Charlish in Warsaw
and Krisztina Than in Budapest, Editing by William Maclean)
  
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