July 11, 2017 / 9:27 AM / a month ago

CEE MARKETS-Bonds, forex ease on expectations of hawkish ECB, Fed comments

    * Bond yields track euro zone rise ahead of ECB, Fed
speakers
    * Currencies ease less than other emerging market units
    * Romanian headline, Hungarian core inflation rises
    * Czech central bank sees risk of crown weakness-minutes

    By Sandor Peto
    BUDAPEST, July 11 (Reuters) - Central European government
bonds and currencies eased slightly on Tuesday amid expectations
for hawkish comments from Federal Reserve and European Central
Bank (ECB) officials.
    Economic data released in the region on Tuesday showed a
rise in Romanian headline and Hungarian core inflation, but most
of the region's central banks are not expected to start lifting
their interest rates this year.
    Euro zone bond yields resumed their rise ahead of speeches
by ECB's Benoit Coeure and Fed Governor Lael Brainard on Tuesday
and Fed chair Janet Yellen on Wednesday.
    Hungarian and Polish government bonds tracked the move, with
their yields rising by 1-3 basis points. Their respective
10-year yields traded at 3.18 and 3.33 percent.
    The rise is caused by international factors rather than the
Hungarian June inflation figures, traders and analysts said.
    Annual core inflation rose to 2.4 percent from 2.1 percent
in may, although the headline figure which also includes
volatile food and energy prices dropped to 1.9 percent from 2.1
percent.
    "In the shorter run... inflation should remain on the softer
side of the central bank's inflation target band (3 percent +/-
one percentage point), thus we do not expect any change in the
policy rate this and next year," said Gergely Urmossy, analyst
of Erste group.
    The Czech crown led a mild weakening of regional
currencies, shedding 0.2 percent against the euro, while the
forint and the zloty eased 0.1 percent. 
    Shielded by the region's relative stability and economic
growth, they weakened much less than other emerging market units
like the lira, the rouble and the rand.
    The Czech central bank said in the minutes of its last
meeting that the crown's exchange rate "remained a persisting
source of uncertainty" as the currency may ease on selling by
investors who bought it before the bank removed its cap on the
currency's strength in April.
    It said its first rate hike in almost a decade might come
later than its projection for the third quarter of 2017 as it
needed to make sure that "the inflation pressures arising from
the domestic economy were robust enough to outweigh any
anti-inflationary shocks stemming from abroad".
    The Czech Republic is due to release June inflation figures
on Wednesday and analysts expect a drop in the annual rate to
2.3 percent from 2.4 percent in May.
    Romanian data showed a pick-up to 0.9 percent from 0.6
percent, still a lower level than elsewhere in the region, but
analysts expect a fast pick-up later this year.
    
                CEE MARKETS  SNAPSH   AT  1045 CET         
                             OT                      
                             CURRENCIES                    
                             Latest  Previo  Daily   Change
                                     us              
                             bid     close   change  in
                                                     2017
 Czech crown                 26.138  26.094  -0.17%   3.32%
                                  0       5          
 Hungary                     308.28  308.10  -0.06%   0.18%
 forint                          00      50          
 Polish zloty                4.2425  4.2394  -0.07%   3.80%
 Romanian leu                4.5685  4.5704   +0.04  -0.73%
                                                  %  
 Croatian kuna               7.4030  7.4015  -0.02%   2.05%
 Serbian dinar               120.13  120.19   +0.05   2.68%
                                 00      00       %  
 Note: daily    calculated   previo  close   1800          
 change         from         us      at      CET     
                             STOCKS                        
                             Latest  Previo  Daily   Change
                                     us              
                                     close   change  in
                                                     2017
 Prague                      997.79  999.00  -0.12%   +8.27
                                                          %
 Budapest                    35776.  35724.   +0.15   +11.7
                                 74      92       %      9%
 Warsaw                      2304.6  2300.6   +0.17   +18.3
                                  1       6       %      1%
 Bucharest                   8143.6  8112.1   +0.39   +14.9
                                  2       6       %      4%
 Ljubljana                   809.93  804.90   +0.62   +12.8
                                                  %      7%
 Zagreb                      1860.4  1860.6  -0.01%  -6.74%
                                  6       1          
 Belgrade                    717.73  716.42   +0.18   +0.05
                                                  %       %
 Sofia                       707.28  709.26  -0.28%   +20.6
                                                         1%
                             BONDS                         
                             Yield   Yield   Spread  Daily
                             (bid)   change  vs      change
                                             Bund    in
 Czech                                               spread
 Republic                                            
   2-year                      0.12    0.12   +072b   +11bp
                                                 ps       s
   5-year                     0.156    0.04   +025b   +2bps
                                                 ps  
   10-year                     1.07  -0.023   +051b   -5bps
                                                 ps  
 Poland                                                    
   2-year                     1.833  -0.096   +243b  -10bps
                                                 ps  
   5-year                     2.706   0.039   +280b   +2bps
                                                 ps  
   10-year                    3.351   0.034   +279b   +1bps
                                                 ps  
                FORWARD      RATE    AGREEMENT             
                             3x6     6x9     9x12    3M
                                                     interb
                                                     ank
 Czech Rep              <PR    0.32     0.5     0.5       0
                IBOR=>                               
 Hungary                <BU    0.21    0.23    0.25    0.15
                BOR=>                                
 Poland                 <WI   1.755     1.8   1.835    1.73
                BOR=>                                
 Note: FRA      are for ask                                
 quotes         prices                               
 **********************************************************
 ****
 
 (Reporting by Sandor Peto; Editing by Hugh Lawson)
  
 
 

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below