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Robert Muller

CEE MARKETS-Crown creeps higher after Czech bank retains neutral outlook

10:05am EDT

* Czech central bank keeps rates on hold, retains neutral stance * Crown bucks easing of forint and zloty on dollar rebound * Crown is off 9-month highs reached on technical factors * Dovish ECB signals play key role in CEE central bank decisions (Recasts, with Czech central bank decision and comments) By Sandor Peto and Robert Muller BUDAPEST/PRAGUE, June 26 The crown bucked a weakening of other Central European currencies on Wednesday as the Czech central bank retained its neutral rate outlook, not following recent dovish signals from the U.S. Federal Reserve and the European Central Bank. The forint and the zloty shed 0.2% against the euro by 1330 GMT. They weakened as investors bought the dollar after a Federal Reserve official tempered expectations for aggressive monetary easing. Earlier expectations for deeper Fed rate cuts and last week's dovish comments from the European Central Bank were positive for currencies in Central Europe. Some market participants had expected dovish signals from the Czech central bank (CNB) at a news conference after a meeting on Wednesday. Governor Jiri Rusnok said the CNB continued to watch signals from abroad, but said rates could stay unchanged for a relatively long period and that the bank's stance was neutral. One of the seven rate setters even voted for a rate rise. The crown traded at 25.47 to the euro, a tad firmer than Tuesday's close but still near a nine-month high of 25.435 reached late on Tuesday. Domestic factors pushed some central banks in the region into tighter policies as economies in the region grow faster than euro zone peers, and strong wage growth has boosted consumer prices. Dovish policy signals from the ECB, however, suggest that prices of imports from the euro zone could slow and help moderate inflation pressure in Central Europe. The National Bank of Hungary (NBH) cited those signals after its meeting on Tuesday as a justification for keeping rates on hold despite a rise in annual inflation to near the top of its 2-4% target range, while it said it would continue to watch incoming economic data. Some liquidity tightening by the bank and a hike in its -0.05% overnight interest rate into positive territory remains likely in September, KBC analysts said in a note. "It is quite clear that the NBH's next move will be even more dependent on the ECB's action and they want to keep the low interest environment as long as possible," they said. Hungary's 10-year government bond yield was fixed 5 basis points higher at 2.66%, reflecting a smaller rise in the corresponding U.S. and German yields. CEE SNAPSHOT AT MARKETS 1530 CET CURRENCI ES Latest Previous Daily Change bid close change in 2019 Czech <EURCZK= 25.4700 25.4780 +0.03% +0.93% crown > Hungary <EURHUF= 323.6000 322.9500 -0.20% -0.78% forint > Polish <EURPLN= 4.2626 4.2545 -0.19% +0.63% zloty > Romanian <EURRON= 4.7235 4.7199 -0.08% -1.47% leu > Croatian <EURHRK= 7.3950 7.3975 +0.03% +0.20% kuna > Serbian <EURRSD= 117.7600 117.8400 +0.07% +0.46% dinar > Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2019 Prague 1034.14 1040.050 -0.57% +4.82% 0 Budapest 40221.19 40061.95 +0.40% +2.77% Warsaw 2314.66 2303.31 +0.49% +1.67% Bucharest 8655.51 8594.90 +0.71% +17.22% Ljubljana <.SBITOP 887.83 890.23 -0.27% +10.39% > Zagreb 1902.38 1905.02 -0.14% +8.78% Belgrade <.BELEX1 724.06 722.28 +0.25% -4.94% 5> Sofia 576.77 575.34 +0.25% -2.98% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=R 1.5490 0.0760 +229bps +8bps R> 5-year <CZ5YT=R 1.3540 0.0600 +201bps +5bps R> 10-year <CZ10YT= 1.5210 -0.0250 +184bps -4bps RR> Poland 2-year <PL2YT=R 1.5790 0.0070 +232bps +1bps R> 5-year <PL5YT=R 1.9420 0.0130 +259bps +0bps R> 10-year <PL10YT= 2.3540 0.0360 +268bps +3bps RR> FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interban k Czech Rep 2.17 2.06 1.96 2.17 <PRIBOR= > Hungary 0.32 0.43 0.54 0.25 Poland 1.73 1.73 1.71 1.72 Note: FRA are for ask prices quotes ************************************************* ************* (Reporting by Sandor Peto Editing by Alexandra Hudson and Susan Fenton)

CEE MARKETS-Crown eases off 9-month high, Czech rates seen on hold

5:33am EDT

* Crown joins CEE fx easing as dollar rebounds on Fed comments * Czech central bank seen keeping rates on hold * Crown is off 9-month highs reached on technical factors * Dovish ECB signals play key role in CEE central bank decisions By Sandor Peto and Robert Muller BUDAPEST/PRAGUE, June 26 The crown retreated from 9-month highs reached against the euro in the previous session as the Czech central bank (CNB) was expected to keep rates on hold at its meeting on Wednesday, and dollar buying weakened Central European currencies. Demand for the dollar often influences the region's units. Funds flowed into the greenback after a Federal Reserve official tempered expectations for aggressive monetary easing. The forint and the zloty shed 0.2% against the euro by 0831 GMT. The crown eased 0.1% to 25.497, still near Tuesday's 9-month highs of 25.435. The CNB, after delivering its eighth interest rate hike in two years in early May, is expected to keep its 2% two-week repo rate on hold in its decision due at 1100 GMT. Technical factors rather than monetary tightening expectations boosted the crown on Tuesday as some speculative positions were closed so as to stop losses, after the currency crossed 25.52-25.53 versus the euro, one dealer said. Positions are also closed in the market because the end of the half year is near. "I would not expect anything market-moving from the CNB today, after all, they can be quite happy with the crown at these levels," the dealer said. Earlier expectations for deeper Fed rate cuts and last week's dovish comments from the European Central Bank were positive to currencies in the European Union's eastern wing. Economies in the region grow faster than euro zone peers, and a fast catch-up with higher Western wages has boosted consumer prices in the past months. Dovish policy signals from the ECB, however, indicated that import prices could help moderate inflation. The National Bank of Hungary cited those signals after its meeting on Tuesday as a justification for keeping rates on hold despite a rise in annual inflation near the top of its 2-4% target range, while it said it would continue to watch incoming economic data. While most analysts expect Czech rates to stay on hold in the rest of the year, some market participants do not rule out dovish noise from the CNB. "We expect CPI to peak mainly due to considerable base effects related to energy prices and the headline rate to fall back towards the CNB 2% mid-target point in the upcoming months (similar to Hungary)," Raiffeisen analyst Stephan Imre said in a note. "This coupled with signs of economic moderation should prompt a moderate CNB easing cycle as early as Q1 2020; our call has received additional support recently on the heels of another ECB (& FED) dovish push," he added. CEE SNAPSHOT AT MARKETS 1031 CET CURRENCI ES Latest Previous Daily Change bid close change in 2019 Czech <EURCZK= 25.4970 25.4780 -0.07% +0.82% crown > Hungary <EURHUF= 323.6500 322.9500 -0.22% -0.79% forint > Polish <EURPLN= 4.2635 4.2545 -0.21% +0.61% zloty > Romanian <EURRON= 4.7202 4.7199 -0.01% -1.40% leu > Croatian <EURHRK= 7.3950 7.3975 +0.03% +0.20% kuna > Serbian <EURRSD= 117.7600 117.8400 +0.07% +0.46% dinar > Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2019 Prague 1037.57 1040.050 -0.24% +5.17% 0 Budapest 40176.95 40061.95 +0.29% +2.65% Warsaw 2305.32 2303.31 +0.09% +1.26% Bucharest 8588.95 8594.90 -0.07% +16.32% Ljubljana <.SBITOP 889.24 890.23 -0.11% +10.57% > Zagreb 1903.10 1905.02 -0.10% +8.82% Belgrade <.BELEX1 721.69 722.28 -0.08% -5.25% 5> Sofia 574.27 575.34 -0.19% -3.40% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=R 1.5490 0.0760 +229bps +9bps R> 5-year <CZ5YT=R 1.3540 0.0600 +201bps +5bps R> 10-year <CZ10YT= 1.5210 -0.0250 +184bps -4bps RR> Poland 2-year <PL2YT=R 1.5730 0.0010 +232bps +1bps R> 5-year <PL5YT=R 1.9330 0.0040 +259bps -1bps R> 10-year <PL10YT= 2.3460 0.0280 +267bps +2bps RR> FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interban k Czech Rep 2.17 2.06 1.96 2.17 <PRIBOR= > Hungary 0.33 0.42 0.52 0.24 Poland 1.74 1.73 1.71 1.72 Note: FRA are for ask prices quotes ************************************************* ************* (Reporting by Sandor Peto Editing by Alexandra Hudson)

Slavia Prague hope to turn Chinese cash into European success

Jun 07 2019

PRAGUE Fresh off a surprise quarter-final run in the Europa League and flush with cash from their Chinese owner, Slavia Prague are confident they can do what few clubs from the region have done before - play regularly in the Champions League group stage.

UPDATE 2-Czech PM, banks agree to set up fund to boost long-term investments

May 20 2019

* PM says banks agree to provide CZK 6 billion in initial equity

Calf injury brakes Kvitova's French Open momentum

May 17 2019

PRAGUE Petra Kvitova heads into the French Open with two titles under her belt this year but a calf injury in a tournament tune-up match this week has hit the twice Wimbledon champion's momentum.

Tennis-Calf injury brakes Kvitova's French Open momentum

May 17 2019

PRAGUE, May 17 Petra Kvitova heads into the French Open with two titles under her belt since the beginning of 2019, but a calf injury in a tournament tune-up match this week may derail the two-time Wimbledon champion's momentum.

CEE MARKETS-Crown retreats as CNB delivers first and possibly last 2019 hike

May 02 2019

* CNB sees rate stability until mid-2020 * Czech crown, earlier backed by rate hike forecasts, retreats * Forint touches 5-month low, regains ground after strong PMI (Recasts with CNB decision and comments) By Sandor Peto and Robert Muller BUDAPEST, May 2 The crown fell on Thursday after the Czech central bank (CNB) delivered its first 2019 interest rate hike, possibly the last for over a year as Europe's economic slowdown is seen putting a lid on inflation in Central Europe as well. The bank increased its main interest rate by 25 basis points to 2 percent, its eighth hike in a tightening cycle which supported the crown in the past two years. A rise in inflation across Central Europe this year fuelled expectations for one further hike, but the bank's Governor Jiri Rusnok said its new economic outlook did not envisage a further rise in the coming year. The crown, which was flat before the CNB's meeting, weakened by 0.3 percent to 25.7 versus the euro by 1348 GMT. It retreated further from a 3-week high of 25.588 touched in international trade on Wednesday when domestic markets were closed due to the May Day holiday. Ongoing negative sentiment over European economies) will mean a relatively low pace of appreciation by the koruna, Erste analysts said in a note, adding that the Czech currency was generally overbought. The koruna also weakened versus its regional peers, the forint and the zloty, which firmed 0.15 and 0.05 percent respectively versus the euro. In early trade, the crown even touched its strongest levels since January against the forint. The Hungarian unit rebounded from a 5-month low hit at 324.85 early on Thursday. It has been under pressure since the National Bank of Hungary gave up its guidance for gradual monetary tightening in March after slightly increasing its overnight deposit rate to -0.05 percent in what analysts called "a dovish hike". Before the CNB's decision, Rabobank analysts said in a note that the Czech bank could deliver a "dovish hike". The CNB said risks and uncertainties to its forecasts included a more pronounced and possibly also longer-lasting euro zone slowdown, as well as potential protectionist measures affecting global trade and the crown currency's developments. Hungary's central bank said in its statements in March and April and its latest meeting minutes that inflation trends were ambivalent, with strong domestic demand pushing prices higher, but with international impacts weighing on them. Central Europe's first April 2019 inflation data, released in Warsaw early this week, showed a continuing acceleration. But Thursday's weak April purchasing managers' index (PMI) figures from Prague and Poland argued against monetary tightening, while Hungary's own index was robust. CEE SNAPSHOT AT MARKETS 1548 CET CURRENCI ES Latest Previous Daily Change bid close change in 2019 Czech <EURCZK= 25.7000 25.6290 -0.28% +0.03% crown > Hungary <EURHUF= 324.0600 324.5500 +0.15% -0.92% forint > Polish <EURPLN= 4.2810 4.2832 +0.05% +0.20% zloty > Romanian <EURRON= 4.7580 4.7580 +0.00% -2.19% leu > Croatian <EURHRK= 7.4135 7.4120 -0.02% -0.05% kuna > Serbian <EURRSD= 118.0000 117.9700 -0.03% +0.25% dinar > Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2019 Prague 1081.24 1068.720 +1.17% +9.60% 0 Budapest 42479.63 42520.11 -0.10% +8.54% Warsaw 2321.70 2334.21 -0.54% +1.98% Bucharest 8443.20 8441.95 +0.01% +14.35% Ljubljana <.SBITOP 887.95 887.95 +0.00% +10.41% > Zagreb 1839.27 1837.98 +0.07% +5.17% Belgrade <.BELEX1 744.04 744.04 +0.00% -2.32% 5> Sofia 571.94 575.06 -0.54% -3.79% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=R 1.7340 0.1270 +233bps +13bps R> 5-year <CZ5YT=R 1.7750 0.0120 +220bps +2bps R> 10-year <CZ10YT= 1.8900 -0.0040 +188bps +0bps RR> Poland 2-year <PL2YT=R 1.7120 0.0200 +231bps +2bps R> 5-year <PL5YT=R 2.3690 0.0200 +279bps +3bps R> 10-year <PL10YT= 3.0410 0.0310 +303bps +4bps RR> FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interban k Czech Rep 2.23 2.24 2.24 2.05 <PRIBOR= > Hungary 0.34 0.49 0.68 0.16 Poland 1.75 1.77 1.81 1.72 Note: FRA are for ask prices quotes ************************************************* ************* (Additional reporting by Radu Marinas in Bucharest Editing by Mark Heinrich)

CORRECTED-CEE MARKETS-Crown off 3-week highs as CNB meets after weak PMI figures

May 02 2019

(In para 12, please read publication date May 13 (rather than May 10) * CNB meets, hike is a close call; crown flat, off 3-week high * Czech, Polish PMIs stay in contraction territory * Forint touches 5-month low, regains ground after strong PMI By Sandor Peto and Robert Muller BUDAPEST, May 2 The crown traded flat on Thursday, off three-week highs against the euro ahead of the Czech central bank's (CNB) meeting where it may resume its interest rate hikes. Central Europe's first April 2019 inflation data, released in Warsaw early this week, showed a continuing acceleration, adding to the odds of a Czech rate hike. But Thursday's weak April purchasing managers' index (PMI) figures from Prague and Poland argued against monetary tightening. The main indexes were below the 50 mark, which separates economic growth from contraction, and the Czech index at 46.6 was below analysts' forecast of 47.6. At 0900 GMT, the Czech crown was at 25.63 versus the euro, retreating from a 3-week high of 25.588 hit in international trade on Wednesday when domestic markets were closed due to the May Day holiday. It failed to benefit from a softer dollar unlike the forint and the zloty which firmed slightly. In a Reuters poll published on Monday, most analysts predicted a quarter percentage point rise in the CNB's main interest rate to 2 percent at Thursday's meeting. But it was still regarded as a close call as six out of 14 analysts forecast no change in the rate. [nL5N22B41X Czech forward rate agreements (FRAs) pointed towards a 40 percent chance of a rate hike on Thursday, even though the latest comments from two rate setters indicated that a hike may have a majority in the CNB's seven-member board. The CNB's new inflation forecasts will almost certainly point towards a rate rise, Komercni Banka traders said in a note. That was the case in the bank's last forecasts, too, but that time a hike was "postponed mostly due to global risks – now with the Brexit moved to autumn a few of the CNB board members seemed to have joined the hawkish camp", they added. The Czech Republic is due to release April inflation figures on May 13. Hungary's own figures are due to come earlier, next week, and could trigger further forint volatility, market participants said. The forint weakened in illiquid international trade on Wednesday and set a 5-month low at 324.85 early on Thursday. It regained some ground after strong Hungarian PMI figures came out. It has been weakening as the National Bank of Hungary did not signal any further measures to fight inflation after its meeting on Tuesday. "If inflation comes in lower than expected next week, the forint may weaken out of its recent 320-325 range," one Budapest-based trader said, adding that a high figure could reignite expectations for monetary tightening. CEE SNAPSHOT AT MARKETS 1100 CET CURRENCI ES Latest Previous Daily Change bid close change in 2019 Czech <EURCZK= 25.6300 25.6290 -0.00% +0.30% crown > Hungary <EURHUF= 324.4500 324.5500 +0.03% -1.04% forint > Polish <EURPLN= 4.2797 4.2832 +0.08% +0.23% zloty > Romanian <EURRON= 4.7585 4.7580 -0.01% -2.20% leu > Croatian <EURHRK= 7.4140 7.4120 -0.03% -0.05% kuna > Serbian <EURRSD= 117.8800 117.9700 +0.08% +0.36% dinar > Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2019 Prague 1079.79 1068.720 +1.04% +9.45% 0 Budapest 42528.89 42520.11 +0.02% +8.66% Warsaw 2330.47 2334.21 -0.16% +2.36% Bucharest 8473.30 8441.95 +0.37% +14.76% Ljubljana <.SBITOP 887.95 887.95 +0.00% +10.41% > Zagreb 1835.98 1837.98 -0.11% +4.98% Belgrade <.BELEX1 744.04 744.04 +0.00% -2.32% 5> Sofia 572.97 575.06 -0.36% -3.62% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=R 1.7340 0.1270 +233bps +13bps R> 5-year <CZ5YT=R 1.8000 0.0360 +221bps +3bps R> 10-year <CZ10YT= 1.8960 0.0020 +188bps -1bps RR> Poland 2-year <PL2YT=R 1.7040 0.0120 +230bps +1bps R> 5-year <PL5YT=R 2.3760 0.0270 +278bps +2bps R> 10-year <PL10YT= 3.0320 0.0220 +301bps +1bps RR> FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interban k Czech Rep 2.24 2.26 2.26 2.05 <PRIBOR= > Hungary 0.33 0.49 0.69 0.16 Poland 1.76 1.77 1.82 1.72 Note: FRA are for ask prices quotes ************************************************* ************* (Additional reporting by Radu Marinas in Bucharest; editing by Emelia Sithole-Matarise)

Reality check: Dip in growth has Czechs pinching pennies after splurge

Apr 15 2019

PRAGUE A year after embarking on a record spending splurge, the Czech Republic, one of the European Union's star fiscal performers, is falling back into deficit and has started tightening its belt to prevent an economic slowdown from wrecking its budget.

Late Alonso header, Kepa saves hand Chelsea win in Prague

Apr 11 2019

PRAGUE A late header by defender Marcos Alonso and Kepa Arrizabalaga's goalkeeping heroics helped Chelsea beat a stubborn Slavia Prague 1-0 in their Europa League quarter-final, first leg on Thursday.

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