June 3, 2019 / 9:21 AM / 5 months ago

CEE MARKETS-Crown drifts down after weak Czech PMI data

    PRAGUE/BUDAPEST, June 3 (Reuters) - The Czech crown
 slipped 0.1% on Monday, nearing its lowest in more
than three months, after data showed manufacturing sentiment
remained stuck at a six-and-a-half-year-low.
    The headline Czech Markit Purchasing Managers' Index (PMI)
reading was flat at 46.6, below the 50-point-mark dividing
business activity expansion from contraction.
    At 0844 GMT, the crown was 0.1% weaker at 25.854 to the
euro, underperforming its central European peers, which were
unchanged or stronger.
    A Czech trader said the crown continued drifting weaker with
nothing providing a reason for it to strengthen.
    The Czech central bank has said it foresees stable interest
rates, but some analysts say a weaker crown - which contradicts
central bank forecasts for gains - could prompt another rate
increase later this year.
    "There is nothing really strong right now for the crown. Big
foreign banks see the crown weaker, so that is a reason for its
movement weaker," a local trader said. "We will see some data
this week. It is possible to see 25.90 in the days ahead. We are
still seeing some lazy trading.".
    In contrast, the Hungarian PMI, compiled using a different
methodology, jumped to 57.9 in May from 55.1 in April,
reflecting continued strength in the Hungarian economy, which
expanded by a 15-year-high 5.3% in the first quarter.
    The forint was 0.1% stronger in early trade,
although a Budapest-based trader said its gains, which saw it
move away from nine-month-lows hit last week, were probably
losing steam.
    "We are near the bottom of the range, so we rather expect
the forint to drift weaker," the trader said.
    Hungary will publish May inflation data on Friday after
April data showed price growth rising to a seven-year-high of
3.9%.
    The National Bank of Hungary holds its next meeting on June
25, when policy makers will also discuss the next update of the
bank's quarterly inflation report.
    "In our view, the likelihood of the downside risks to
inflation materialising has fallen since the March meeting,"
economists at Goldman Sachs said in a note.
    "We think the (central bank) is likely to introduce further
moderate tightening in monetary conditions in the next MPC
meeting."
           CEE      SNAPSHO   AT                      
           MARKETS  T        1044              
                             CET               
                    CURRENC                           
                    IES                        
                    Latest   Previou  Daily    Change
                             s                 
                    bid      close    change   in 2019
 Czech     <EURCZK  25.8540  25.8320   -0.09%   -0.57%
 crown     =>                                  
 Hungary   <EURHUF  324.450  324.900   +0.14%   -1.04%
 forint    =>             0        0           
 Polish    <EURPLN   4.2823   4.2829   +0.01%   +0.17%
 zloty     =>                                  
 Romanian  <EURRON   4.7485   4.7468   -0.04%   -1.99%
 leu       =>                                  
 Croatian  <EURHRK   7.4160   7.4175   +0.02%   -0.08%
 kuna      =>                                  
 Serbian   <EURRSD  117.790  117.900   +0.09%   +0.43%
 dinar     =>             0        0           
 Note:     calculated from            1800            
 daily                                CET      
 change                                        
                                                      
                    Latest   Previou  Daily    Change
                             s                 
                             close    change   in 2019
 Prague             1038.23  1044.09   -0.56%   +5.24%
                                  00           
 Budapest           40840.0  40904.1   -0.16%   +4.35%
                          7        2           
 Warsaw    <.WIG20  2240.22  2239.31   +0.04%   -1.60%
           >                                   
 Buchares           8517.85  8493.13   +0.29%   +15.36
 t                                                   %
 Ljubljan  <.SBITO   877.36   879.06   -0.19%   +9.09%
 a         P>                                  
 Zagreb    <.CRBEX  1851.83  1851.20   +0.03%   +5.89%
           >                                   
 Belgrade  <.BELEX   733.66   733.32   +0.05%   -3.68%
           15>                                 
 Sofia     <.SOFIX   580.83   582.48   -0.28%   -2.29%
           >                                   
                    BONDS                             
                    Yield    Yield    Spread   Daily
                    (bid)    change   vs Bund  change
                                               in
 Czech                                         spread
 Republic                                      
   2-year  <CZ2YT=   1.6120  -0.0120   +227bp    -1bps
           RR>                              s  
   5-year  <CZ5YT=   1.5980  -0.0140   +218bp    -1bps
           RR>                              s  
           <CZ10YT   1.6930  -0.0730   +191bp    -6bps
 10-year   =RR>                             s  
 Poland                                               
   2-year  <PL2YT=   1.6630  -0.0030   +232bp    +0bps
           RR>                              s  
   5-year  <PL5YT=   2.0730  -0.0350   +266bp    -3bps
           RR>                              s  
           <PL10YT   2.6160  -0.0330   +283bp    -2bps
 10-year   =RR>                             s  
           FORWARD  RATE     AGREEME                  
                             NT                
                    3x6      6x9      9x12     3M
                                               interba
                                               nk
 Czech     <CZKFRA     2.17     2.10     2.03     2.19
 Rep       ><PRIBO                             
           R=>                                 
 Hungary   <HUFFRA     0.30     0.43     0.53     0.20
           ><BUBOR                             
           =>                                  
 Poland    <PLNFRA     1.73     1.74     1.73     1.72
           ><WIBOR                             
           =>                                  
 Note:     are for ask                                
 FRA       prices                              
 quotes                                        
 
 (Reporting by Jason Hovet and Gergely Szakacs; editing by Larry
King)
  
 
 
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