July 9, 2020 / 9:54 AM / a month ago

CEE MARKETS-Currencies inch higher as investors mull global data

    By Alan Charlish
    WARSAW, July 9 (Reuters) - Central European currencies edged
higher in thin trade on Thursday, as investors digested
conflicting signals about the global economy ahead of a
close-fought presidential election in Poland that could provide
some impetus.
    Federal Reserve officials raised fresh doubts on Wednesday
about the durability of the U.S. recovery and on Thursday data
showed German exports rebounded less than expected in May.
However, data from China suggested a slow economic recovery
remains intact.
    "People are ... confused about whether we are going to have
a deeper correction because of the coronavirus and we only see
minor changes in positioning on very low liquidity," said Piotr
Poplawski, senior economist at ING in Poland.
    At 0842 GMT the Polish zloty was 0.12% firmer
against the euro at 4.476, the Hugarian forint had
strengthened 0.23% to 354.3 and the Czech crown gained
0.11% to trade at 26.647.
    "It seems like only short term capital here and not really
big activity," said a Warsaw-based currency trader. "...we have
this presidential election in Poland this weekend so maybe this
will be a trigger somehow."
    Incumbent President Andrzej Duda, an ally of ruling
nationalists Law and Justice (PiS) will face liberal Warsaw
Mayor Rafal Trzaskowski in the second round of Poland's
presidential election on Sunday.
    The Hungarian central bank's surprise decision to cut the
base rate by 15 basis points to 0.75% on June 23 was supported
by all rate-setters, the bank said on Wednesday.
    The bank's deputy governor Barnabas Virag later said the NBH
may cut its base rate by another 15 basis points this month.
    "Crucially, the minutes do not offer any reassurance to
those market participants who fear that low rates have now been
"locked in" irrespective of inflation dynamics," Commerzbank
wrote in a client note.
    "And this spells trouble for the forint exchange rate as the
situation normalises," it added.
    Investors were also awaiting results of a Polish finance
ministry switch tender. On Wednesday, the central bank bought
state-guaranteed and government bonds worth a total of 5.15
billion zlotys ($1.30 billion) as part of its anti-crisis
liquidity measures.
    Benchmark Polish 10-year yields rose 1 basis
point to 1.365%.
    Czech 10-year yields were up 1 basis point at 0.797%, little
moved by news that the Czech lower house of parliament approved
a government plan to run a record 500 billion crown central
state budget deficit in 2020.
    Stocks were mostly higher, as European equity markets took
their lead from rising Asian share prices on hopes of a faster
recovery for China.
    In Warsaw the WIG 20 was up 0.39% while in Prague
the PX index rose 0.55%.
    
    
                   CEE      SNAPSHO   AT                      
                   MARKETS  T        1042              
                                     CET               
                                                              
                   CURRENC                                    
                   IES                                 
                            Latest   Previou  Daily    Change
                                     s                 
                            bid      close    change   in 2020
 EURCZK  Czech     <EURCZK  26.6470  26.6765   +0.11%   -4.56%
 =       crown     =>                                  
 EURHUF  Hungary   <EURHUF  354.300  355.105   +0.23%   -6.54%
 =       forint    =>             0        0           
 EURPLN  Polish    <EURPLN   4.4760   4.4814   +0.12%   -4.91%
 =       zloty     =>                                  
 EURRON  Romanian  <EURRON   4.8410   4.8410   +0.00%   -1.09%
 =       leu       =>                                  
 EURHRK  Croatian  <EURHRK   7.5350   7.5383   +0.04%   -1.19%
 =       kuna      =>                                  
 EURRSD  Serbian   <EURRSD  117.540  117.590   +0.04%   +0.03%
 =       dinar     =>             0        0           
         Note:     calculated from            1800            
         daily                                CET      
         change                                        
                                                              
                   STOCKS                                     
                            Latest   Previou  Daily    Change
                                     s                 
                                     close    change   in 2020
 .PX     Prague              943.99  938.850   +0.55%  -15.39%
                                           0           
 .BUX    Budapest           35888.5  35932.3   -0.12%  -22.12%
                                  8        9           
 .WIG20  Warsaw    <.WIG20  1795.20  1788.22   +0.39%  -16.51%
                   >                                   
 .BETI   Buchares           8566.88  8531.26   +0.42%  -14.14%
         t                                             
 .SBITO  Ljubljan  <.SBITO   855.37   853.73   +0.19%   -7.61%
 P       a         P>                                  
 .CRBEX  Zagreb    <.CRBEX  1609.54  1614.31   -0.30%  -20.22%
                   >                                   
 .BELEX  Belgrade  <.BELEX   655.68   659.67   -0.60%  -18.21%
 15                15>                                 
 .SOFIX  Sofia     <.SOFIX   447.79   448.19   -0.09%  -21.18%
                   >                                   
                                                              
                   BONDS                                      
                            Yield    Yield    Spread   Daily
                            (bid)    change   vs Bund  change
                                                       in
         Czech                                         spread
         Republic                                      
 CZ2YT=    2-year  <CZ2YT=   0.0650   0.0540   +074bp    +6bps
 RR                RR>                              s  
 CZ5YT=    5-year  <CZ5YT=   0.3180   0.0010   +097bp    +1bps
 RR                RR>                              s  
 CZ10YT            <CZ10YT   0.7970   0.0130   +124bp    +2bps
 =RR     10-year   =RR>                             s  
         Poland                                               
 PL2YT=    2-year  <PL2YT=   0.1130  -0.0240   +078bp    -2bps
 RR                RR>                              s  
 PL5YT=    5-year  <PL5YT=   0.7540   0.0080   +141bp    +2bps
 RR                RR>                              s  
 PL10YT            <PL10YT   1.3650   0.0090   +181bp    +1bps
 =RR     10-year   =RR>                             s  
                                                              
                   FRA                                        
                            3x6      6x9      9x12     3M
                                                       interba
                                                       nk
         Czech     <CZKFRA     0.29     0.28     0.29     0.34
         Rep       ><PRIBO                             
                   R=>                                 
         Hungary   <HUFFRA     0.65     0.63     0.62     0.71
                   ><BUBOR                             
                   =>                                  
         Poland    <PLNFRA     0.21     0.20     0.22     0.26
                   ><WIBOR                             
                   =>                                  
         Note: FRA quotes are for                             
         ask prices                                    
         ********************************************         
         ******************                            
                                                              
    

($1 = 3.9464 zlotys)

 (Reporting by Alan Charlish in Warsaw, Anita Komuves in
Budapest and Jason Hovet in Prague; Editing by Rashmi Aich)
  
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