July 22, 2020 / 9:25 AM / 19 days ago

CEE MARKETS-Currencies ease, assets mixed as EU deal rally ends

    By Anita Komuves
    BUDAPEST, July 22 (Reuters) - Central European currencies
eased on Wednesday and stock markets were mixed as market
euphoria over Tuesday's EU deal on a  coronavirus stimulus plan
fizzled a day after European shares had hit four-month highs.
    News from China that the United States had abruptly told it
to close its consulate in Houston is also weighing on sentiment.
 
    "The headlines about the Houston consulate affected most
emerging currencies negatively," a Budapest-based FX trader
said.
    "If US-China tensions escalate further, that could have a
bigger effect on markets."
    The Czech crown eased 0.15% by 0830 GMT and was
trading at 26.410 to the euro. The Polish zloty was
down 0.19% at 4.441 versus the common currency. The Romanian leu
 was little moved.
    The Hungarian forint slid 0.21% on the day but
held on to most of its gains from previous days, trading at
350.74 versus the euro a day after the central bank cut its its
base rate by 15 basis points to 0.6%, as expected.        
    The rate cut had already been priced in by markets and was
not expected to heavily move the forint's exchange rate,
analysts said.
    The bank said it would resume its government-bond purchases,
targeting the long end of the yield curve. The central bank
launched its QE programme in early May, but suspended it after a
few weeks.
    According to a client note by Commerzbank, this move "will
strengthen the impression that, whether or not inflation truly
moderates, MNB will lock in near-zero interest rates for as long
as it can." 
    "In the medium-term, such a perception will weigh down on
the forint exchange rate."
    Regional equities were mixed on Tuesday, with Warsaw's stock
market down 0.47%. Prague's eased 0.36% while
Budapest's blue chip index firmed 0.14%. Bucharest's
stock market was up 0.14%. 
            
                     CEE       SNAPSHO   AT                      
                     MARKETS   T        1030 CET           
                               CURRENC                           
                               IES                         
                               Latest   Previous  Daily    Change
                               bid      close     change   in
                                                           2020
 EURCZK=  Czech      <EURCZK=  26.4100   26.3700   -0.15%  -3.70%
          crown      >                                     
 EURHUF=  Hungary    <EURHUF=  350.740  350.0000   -0.21%  -5.59%
          forint     >               0                     
 EURPLN=  Polish     <EURPLN=   4.4415    4.4330   -0.19%  -4.17%
          zloty      >                                     
 EURRON=  Romanian   <EURRON=   4.8400    4.8405   +0.01%  -1.07%
          leu        >                                     
 EURHRK=  Croatian   <EURHRK=   7.5200    7.5265   +0.09%  -0.99%
          kuna       >                                     
 EURRSD=  Serbian    <EURRSD=  117.500  117.6500   +0.13%   +0.06
          dinar      >               0                          %
          Note:      calculated from              1800           
          daily                                   CET      
          change                                           
                                                                 
                               Latest   Previous  Daily    Change
                                        close     change   in
                                                           2020
 .PX      Prague                947.34  950.8000   -0.36%  -15.08
                                                                %
 .BUX     Budapest             35536.4  35488.15   +0.14%  -22.89
                                     7                          %
 .WIG20   Warsaw               1836.60   1845.34   -0.47%  -14.58
                                                                %
 .BETI    Bucharest            8574.53   8561.75   +0.15%  -14.06
                                                                %
 .SBITOP  Ljubljana  <.SBITOP   852.85    858.76   -0.69%  -7.89%
                     >                                     
 .CRBEX   Zagreb               1603.59   1604.08   -0.03%  -20.51
                                                                %
 .BELEX1  Belgrade   <.BELEX1   663.80    664.03   -0.03%  -17.20
 5                   5>                                         %
 .SOFIX   Sofia                 441.45    441.46   -0.00%  -22.30
                                                                %
                                                                 
                               Yield    Yield     Spread   Daily
                               (bid)    change    vs Bund  change
                                                           in
          Czech                                            spread
          Republic                                         
 CZ2YT=R    2-year   <CZ2YT=R   0.1910    0.1540   +087bp   +17bp
 R                   R>                                 s       s
 CZ5YT=R    5-year   <CZ5YT=R   0.4220   -0.0490   +109bp   -4bps
 R                   R>                                 s  
 CZ10YT=    10-year  <CZ10YT=   0.8740    0.0230   +134bp   +3bps
 RR                  RR>                                s  
          Poland                                                 
 PL2YT=R    2-year   <PL2YT=R   0.1280   -0.0090   +081bp   +0bps
 R                   R>                                 s  
 PL5YT=R    5-year   <PL5YT=R   0.7420   -0.0190   +141bp   -1bps
 R                   R>                                 s  
 PL10YT=    10-year  <PL10YT=   1.3040   -0.0190   +177bp   -1bps
 RR                  RR>                                s  
                     FORWARD                                     
                               3x6      6x9       9x12     3M
                                                           interb
                                                           ank
          Czech Rep               0.30      0.31     0.32    0.34
                     <PRIBOR=                              
                     >                                     
          Hungary                 0.62      0.59     0.57    0.70
                                                           
          Poland                  0.20      0.20     0.22    0.25
                                                           
          Note: FRA  are for ask                                 
          quotes     prices                                
          ***********************************************        
          ***************                                  
 

 (Editing by Angus MacSwan)
  
 
 
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