September 13, 2019 / 9:17 AM / 2 days ago

CEE MARKETS-Currencies stabilise, bond yields tick up in ECB aftermath

    By Jason Hovet
    PRAGUE, Sept 13 (Reuters) - Central European currencies
steadied on Friday after rallying when the European Central Bank
cut interest rates deeper into negative territory and promised
more bond purchases, while the region's yields ticked back up.
    The ECB's launch of further stimulus to stoke a euro zone
economic recovery, which has lagged solid growth in central
Europe, gave a quick boost to the region's assets on Friday
before questions over the plans' effectiveness arose.
    Currencies had spiked on Thursday after the ECB action but
then gave back some gains while the yield on Poland's 10-year
benchmark dropped briefly below 2% before settling. It was last
bid at 2.08% on Friday.
    Unlike with the ECB, monetary policy in central Europe
remains in a wait-and-see mode.
    "In our view, in the coming weeks the potential for a return
to historical lows is limited and 10-year bond (yields) will
remain above 2 percent," PKO Bank Polski in Warsaw said.
    Czech bond yields also ticked up 2-5 basis points along the
longer end of the curve, with 10-year paper at a
mid-yield of 1.34% in Friday trading and Hungarian yields rising
by up to 6 basis points, putting the 10-year benchmark yield at
2.12%. 
    One dealer said market focus was already turning toward a
U.S. Federal Reserve policy meeting along with Hungarian and
Czech central bank meetings this month for more guidance.
    By 0844 GMT, the Hungarian forint had dropped 0.1%
to 332.77 bid against the euro, just off a record low 333.46 hit
this week. 
    Poland's zloty also fell to 4.34 to the euro and the Czech
crown and Romanian leu were a touch higher.
    Most analysts do not expect the region's central banks to
follow the ECB action, and also a loosening of policy by the
U.S. Fed anytime soon. 
    "In Hungary and Czech Republic, we expect the central banks
to keep rates on hold with downside risks from weaker growth in
the euro area and the ECB's easing of monetary conditions to
outweigh the still strong domestic demand growth and inflation
pressures," Morgan Stanley said.
    Czech rates markets price in cuts over the next year
although rates have slightly ticked up in recent weeks. ING
economist Jakub Seidler in Prague said the need for Czech
interest rate cuts was limited this year.
    Czech central bankers Marek Mora and Oldrich Dedek both told
Reuters this week rate stability was likely as a solid domestic
economy remains resilient so far to slowdowns abroad.

    
    
                  CEE      SNAPSH   AT                   
                  MARKETS  OT      1044            
                                   CET             
                           CURREN                        
                           CIES                    
                           Latest  Previo  Daily   Change
                                   us              
                           bid     close   change  in
                                                   2019
 EURCZK  Czech    <EURCZK  25.849  25.862   +0.05  -0.55%
 =       crown    =>            0       5       %  
 EURHUF  Hungary  <EURHUF  332.77  332.45  -0.10%  -3.51%
 =       forint   =>           00      00          
 EURPLN  Polish   <EURPLN  4.3403  4.3356  -0.11%  -1.17%
 =       zloty    =>                               
 EURRON  Romania  <EURRON  4.7355  4.7376   +0.04  -1.72%
 =       n leu    =>                            %  
 EURHRK  Croatia  <EURHRK  7.3950  7.3933  -0.02%   +0.20
 =       n kuna   =>                                    %
 EURRSD  Serbian  <EURRSD  Retrie  117.50  #VALUE  #VALUE
 =       dinar    =>       ving..      00    !       !
                           .                       
         Note:    calculated from          1800          
         daily                             CET     
         change                                    
                                                         
                           Latest  Previo  Daily   Change
                                   us              
                                   close   change  in
                                                   2019
 .PX     Prague            1049.7  1049.4   +0.04   +6.41
                                9     200       %       %
 .BUX    Budapes           40090.  40066.   +0.06   +2.43
         t                     69      95       %       %
 .WIG20  Warsaw   <.WIG20  2197.2  2189.0   +0.37  -3.49%
                  >             4       7       %  
 .BETI   Buchare           9216.6  9221.6  -0.05%   +24.8
         st                     8       9              3%
 .SBITO  Ljublja  <.SBITO  850.27  851.62  -0.16%   +5.72
 P       na       P>                                    %
 .CRBEX  Zagreb   <.CRBEX  1889.4  1891.7  -0.12%   +8.04
                  >             3       9               %
 .BELEX  Belgrad  <.BELEX  763.80  762.59   +0.16   +0.28
 15      e        15>                           %       %
 .SOFIX  Sofia    <.SOFIX  577.43  578.01  -0.10%  -2.86%
                  >                                
                           BONDS                         
                           Yield   Yield   Spread  Daily
                           (bid)   change  vs      change
                                           Bund    in
         Czech                                     spread
         Republi                                   
         c                                         
 CZ2YT=           <CZ2YT=  1.2740  0.0540   +195b   +3bps
 RR      2-year   RR>                          ps  
 CZ5YT=           <CZ5YT=  1.1340  -0.038   +188b   -7bps
 RR      5-year   RR>                   0      ps  
 CZ10YT           <CZ10YT  1.3940  0.0540   +189b   +1bps
 =RR     10-year  =RR>                         ps  
         Poland                                          
 PL2YT=           <PL2YT=  1.5720  0.0110   +225b   -1bps
 RR      2-year   RR>                          ps  
 PL5YT=           <PL5YT=  1.8560  0.0430   +260b   +1bps
 RR      5-year   RR>                          ps  
 PL10YT           <PL10YT  2.0870  0.0580   +258b   +2bps
 =RR     10-year  =RR>                         ps  
                  FORWARD  RATE    AGREEM                
                                   ENT             
                           3x6     6x9     9x12    3M
                                                   interb
                                                   ank
         Czech    <CZKFRA    2.11    2.01    1.99    2.14
         Rep      ><PRIBO                          
                  R=>                              
         Hungary  <HUFFRA    0.26    0.30    0.33    0.21
                  ><BUBOR                          
                  =>                               
         Poland   <PLNFRA    1.73    1.71    1.69    1.72
                  ><WIBOR                          
                  =>                               
         Note:    are for ask                            
         FRA      prices                           
         quotes                                    
         ****************************************        
         **********************                    
    

 (Reporting by Jason Hovet in Prague, Krisztina Than in Budapest
and Alan Charlish in Warsaw; editing by Emelia Sithole-Matarise)
  
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