July 17, 2020 / 9:32 AM / a month ago

CEE MARKETS-Currencies unmoved, stocks down before EU summit

    By Anita Komuves
    BUDAPEST, July 17 (Reuters) - Central European currencies
were looking for direction and stocks were down on Friday before
a European Union summit to discuss a 750 billion-euro
coronavirus recovery fund.
    Opposition from the Netherlands and the threat of a
Hungarian veto weighed on chances of a deal.
    The Hungarian forint was down 0.16% and trading at
354.05 to the euro, in a range where it has been stuck for
weeks. 
    "The next impetus will come from the central bank's rate
meeting next Tuesday," Equilor said in a note. 
    The bank is expected to cut its base rate by 15 basis points
to 0.6% at the meeting, according to Reuters poll of
analysts.
    "This new 15 basis point rate cut has already been priced in
by markets," CIB Bank wrote in a note. "If the bank confirms
after Tuesday's meeting that no more easing is to be expected
for the time being, then the effect on the forint could be
modest."
    Elsewhere, higher-than-expected inflation was expected by
analysts to influence FX markets. 
    Czech consumer prices rose 3.3% year-on-year in June, above
the central bank's target of 2% with a 1 percentage-point
tolerance band.  
    Komercni Banka said that the crown could resume
strengthening as market rates rise, since higher-than-expected
inflation data last week led investors to scale back bets on a
rate cut. 
    The crown was little changed on Friday, trading at
26.690 to the euro. The Polish zloty was unchanged at
4.479 versus the euro.
    Polish net inflation rose to 4.1% year on year in June,
above the NBP's upper tolerance limit of 3.5%.  
    "A high inflation rate makes the real interest rate more
negative and if this does not change, it will hurt the zloty,"
Commerzbank wrote in a note. 
    Stocks in the region slid, with Warsaw's equities
down 0.6%, Budapest losing 0.5% and Prague easing
0.3%. Bucharest's stocks edged up 0.08%.

    
            CEE        SNAPSHOT    AT  1016                    
            MARKETS               CET                  
                       CURRENCIE                               
                       S                               
                       Latest     Previous   Daily     Change
                       bid        close      change    in 2020
 Czech                   26.6900    26.6990    +0.03%    -4.71%
 crown                                                 
 Hungary                354.0500   353.5000    -0.16%    -6.47%
 forint                                                
 Polish                   4.4790     4.4790    +0.00%    -4.97%
 zloty                                                 
 Romanian                 4.8435     4.8428    -0.01%    -1.14%
 leu                                                   
 Croatian                 7.5370     7.5403    +0.04%    -1.22%
 kuna                                                  
 Serbian                117.5600   117.6300    +0.06%    +0.01%
 dinar                                                 
 Note:      calculated from                  1800 CET          
 daily                                                 
 change                                                
                                                               
                       Latest     Previous   Daily     Change
                                  close      change    in 2020
 Prague                   946.61   949.0900    -0.26%   -15.15%
 Budapest               35069.92   35229.08    -0.45%   -23.90%
 Warsaw                  1787.95    1799.08    -0.62%   -16.84%
 Bucharest               8433.15    8426.66    +0.08%   -15.48%
 Ljubljana                870.90     870.43    +0.05%    -5.94%
 Zagreb                  1605.71    1609.10    -0.21%   -20.41%
 Belgrade   <.BELEX15     656.84     656.61    +0.04%   -18.07%
            >                                          
 Sofia                    444.77     444.77    +0.00%   -21.71%
                                                               
                       Yield      Yield      Spread    Daily
                       (bid)      change     vs Bund   change
                                                       in
 Czech                                                 spread
 Republic                                              
   2-year   <CZ2YT=RR     0.2080     0.0560   +089bps     +5bps
            >                                          
   5-year   <CZ5YT=RR     0.3760    -0.0680   +104bps     -8bps
            >                                          
   10-year  <CZ10YT=R     0.8790    -0.0460   +135bps     -5bps
            R>                                         
 Poland                                                        
   2-year   <PL2YT=RR     0.1190    -0.0250   +080bps     -3bps
            >                                          
   5-year   <PL5YT=RR     0.7560    -0.0270   +142bps     -4bps
            >                                          
   10-year  <PL10YT=R     1.3310    -0.0160   +180bps     -2bps
            R>                                         
            FORWARD                                            
                       3x6        6x9        9x12      3M
                                                       interban
                                                       k
 Czech Rep          <       0.34       0.35      0.35      0.34
            PRIBOR=>                                   
 Hungary            <       0.67       0.66      0.65      0.70
            BUBOR=>                                    
 Poland             <       0.20       0.20      0.22      0.25
            WIBOR=>                                    
 Note: FRA  are for ask prices                                 
 quotes                                                
 ****************************************************          
 **********                                            
    

 (Additional reporting by Jason Hovet in Prague, editing by
Larry King)
  
 
 
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