August 8, 2019 / 9:55 AM / 3 months ago

CEE MARKETS-Currencies mixed, stocks up on China's export rebound

    WARSAW, Aug 8 (Reuters) - The forint firmed on Thursday
after Hungary reported a drop in inflation in line with
forecasts, while central European shares tracked global stocks
higher on relief over a rebound in Chinese exports and a
steadying of the yuan.
    Hungarian headline inflation slowed to 3.3% in
July from 3.4% in June after hitting a seven-year-high of 3.9%
in May, supporting the central bank's policy of leaving interest
rates unchanged in view of an expected decline in inflation. 
    The central bank's closely watched core inflation figure
adjusted for tax changes also slowed to 3.2% in July from 3.5%
in June.
    "It supports the National Bank of Hungary's wait-and-see
stance and maybe market players have started to stop betting
against the National Bank of Hungary and are closing some short
positions," said Peter Virovacz, senior economist at ING
Hungary.
    By 0857 GMT the forint had firmed 0.27% against
the euro to be bid at 325.03. The Czech crown was a
shade weaker at 25.776 while the Polish zloty was
stable at 4.306.
    The Czech unemployment rate rose to 2.7% of the workforce in
July from 2.6% in June, the Labour Ministry said on Thursday,
growth which was in line with analysts' forecasts.
    Stocks in the region rose on improved global risk appetite,
with Poland's blue-chip WIG 20 index gaining 1.3% and
Prague's PX index rising 1.0%.
    China's exports unexpectedly returned to growth in July on
improved global demand, buoying global stock markets which had
been hit by turmoil centred around an escalation of U.S.-China
trade tensions.
    Czech 10-year government bond yields rose 6
basis points to 1.019%, while Polish 10-year yields rose over 2
basis points to 2.039%.
    Poland is holding a bond switch auction on Thursday.
    "The auction, apart from the Bund weakening, can be a
trigger for a yield rebound on the Polish market," Santander
Bank Polska analysts said in a note.
            CEE        SNAPSHOT   AT                         
            MARKETS              1141 CET            
                       CURRENCI                              
                       ES                            
                       Latest    Previous  Daily     Change
                       bid       close     change    in 2019
 Czech                  25.7780   25.7620    -0.06%    -0.28%
 crown                                               
 Hungary               324.9000  326.2100    +0.40%    -1.17%
 forint                                              
 Polish                  4.3223    4.3221    -0.00%    -0.76%
 zloty                                               
 Romanian                4.7315    4.7295    -0.04%    -1.64%
 leu                                                 
 Croatian                7.3800    7.3810    +0.01%    +0.41%
 kuna                                                
 Serbian               117.5500  117.6700    +0.10%    +0.64%
 dinar                                               
 Note:      calculated from                1800 CET          
 daily                                               
 change                                              
                                                             
                       Latest    Previous  Daily     Change
                                 close     change    in 2019
 Prague                 1026.92  1015.700    +1.10%    +4.09%
                                        0            
 Budapest              40436.97  40283.52    +0.38%    +3.32%
 Warsaw                 2161.90   2138.23    +1.11%    -5.04%
 Bucharest              9102.06   9064.84    +0.41%   +23.27%
 Ljubljana               858.24    861.63    -0.39%    +6.71%
 Zagreb                 1897.74   1899.52    -0.09%    +8.52%
 Belgrade   <.BELEX15    739.84    740.86    -0.14%    -2.87%
            >                                        
 Sofia                   584.12    579.12    +0.86%    -1.74%
                       BONDS                                 
                       Yield     Yield     Spread    Daily
                       (bid)     change    vs Bund   change
                                                     in
 Czech                                               spread
 Republic                                            
   2-year   <CZ2YT=RR    0.9440    0.0070   +179bps     -1bps
            >                                        
   5-year   <CZ5YT=RR    0.7900    0.0420   +162bps     +3bps
            >                                        
   10-year  <CZ10YT=R    1.0190    0.0610   +159bps     +5bps
            R>                                       
 Poland                                                      
   2-year   <PL2YT=RR    1.5620    0.0010   +241bps     -1bps
            >                                        
   5-year   <PL5YT=RR    1.8290    0.0180   +266bps     +1bps
            >                                        
   10-year  <PL10YT=R    2.0390    0.0260   +261bps     +1bps
            R>                                       
            FORWARD    RATE      AGREEMEN                    
                                 T                   
                       3x6       6x9       9x12      3M
                                                     interban
                                                     k
 Czech Rep          <      2.07      1.86      1.70      2.15
            PRIBOR=>                                 
 Hungary            <      0.29      0.31      0.33      0.25
            BUBOR=>                                  
 Poland             <      1.74      1.72      1.69      1.72
            WIBOR=>                                  
 Note: FRA  are for ask prices                               
 quotes                                              
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 (Reporting by Alan Charlish, additional reporting by Jan
Lopatka; Editing by Kirsten Donovan)
  
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