By Marton Dunai
BUDAPEST, May 26 Emerging European currencies
moved in narrow ranges in early Friday trading and stocks were
mildly stronger as investors expected U.S. data later in the day
to give a clearer direction to flows.
"We expect uncertain trading until the afternoon U.S. data,"
brokerage Equilor wrote in a note to clients in Budapest. "The
U.S. GDP could set the direction for European trading."
The preliminary GDP reading surprised on the downside and
although it is expected to be revised higher, the Federal
Reserve struck a cautious tone. Slower rate hikes could drive
investors toward higher-yielding assets in emerging markets.
"The Wednesday Fed minutes showed policymakers were split
about the optimum rate hike pace, and several of them hinge the
further rate trajectory on incoming data, so it is worthwhile
watching today's data closely," Equilor added.
On Friday morning currencies were mostly flat, with the
Polish zloty's 0.1 percent fall the largest move in the region.
Stocks were also little moved, with Warsaw down 0.9 percent
after leading a rise in the previous session.
Poland's finance minister said on Thursday that the 2017
budget deficit will be lower than the planned 59.4 billion
zloty, but its size depends on how many people take advantage of
a lower retirement age in the autumn.
Finance minister Mateusz Morawiecki also said in an
interview at the Reuters Central & Eastern Europe Investment
Summit that he expects no changes to taxation next year and the
deficit forecast for 2018 is likely to be lower than 2017.
Czech Prime Minister Bohuslav Sobotka also addressed the
summit to say Prague must narrow a wage gap with west European
states and should strive to join the euro, adding that the path
to higher living standards would be the main issue in elections
Sobotka has presided over a period of strong economic
growth, low borrowing costs and rising wages, but his Social
Democrat party faces a tough task to beat the rival ANO movement
of former finance minister Andrej Babis in the parliamentary
election, due in October.
The Czech Republic, a safe-haven market throughout the
recent economic crisis, may be the first market to see a rate
hike later this year, bucking a trend of years of record low
interest rates and loose monetary policy regionwide.
CEE MARKETS SNAPSH AT 1051 CET
Latest Previo Daily Change
bid close change in
Czech crown 26.437 26.444 +0.03 2.16%
0 5 %
Hungary 307.10 307.31 +0.07 0.56%
forint 00 50 %
Polish zloty 4.1771 4.1759 -0.03% 5.43%
Romanian leu 4.5540 4.5513 -0.06% -0.42%
Croatian 7.4275 7.4295 +0.03 1.72%
Serbian 122.59 122.69 +0.08 0.62%
dinar 00 00 %
Note: daily calculated previo close 1800
change from us at CET
Latest Previo Daily Change
close change in
Prague 1013.4 1009.9 +0.34 +9.96
4 7 % %
Budapest 34364. 34349. +0.04 +7.38
41 11 % %
Warsaw 2337.6 2358.4 -0.88% +20.0
4 1 1%
Bucharest 8621.8 8590.1 +0.37 +21.6
5 8 % 9%
Ljubljana 788.60 791.12 -0.32% +9.90
Zagreb 1853.9 1853.0 +0.04 -7.06%
2 9 %
Belgrade 731.21 736.47 -0.71% +1.93
Sofia 661.53 658.50 +0.46 +12.8
Yield Yield Spread Daily
(bid) change vs change
2-year -0.117 0.065 +056b +7bps
5-year -0.056 -0.004 +032b +0bps
10-year 0.73 -0.117 +039b -10bps
2-year 1.921 0.009 +260b +2bps
5-year 2.714 -0.038 +309b -3bps
10-year 3.3 -0.004 +296b +1bps
FORWARD RATE AGREEMENT
3x6 6x9 9x12 3M
Czech Rep <PR 0.36 0.43 0.52 0
Hungary <BU 0.18 0.22 0.28 0
Poland <WI 1.77 1.8 1.83 1.73
Note: FRA are for ask
(Reporting by Marton Dunai; Editing by Toby Chopra)