June 25, 2019 / 9:40 AM / a month ago

CEE MARKETS-Forint slips ahead of rate decision

    By Marton Dunai
    BUDAPEST, June 25 (Reuters) - Hungary's forint weakened
slightly ahead of a central bank rate decision due later on
Tuesday which is expected to leave rates flat despite inflation
pressures.
    The Hungarian unit underperformed regional peers, which were
broadly unchanged, although it remained in the wider range
around 324 against the euro it has charted in recent days.
    Analysts said they expected Hungarian rates to stay
unchanged after the European Central Bank struck a dovish tone,
even with inflation in Hungary at the top of the central bank's
tolerance range around 4 percent.
    "Emotions have calmed down ahead of the rate decision today,
even considering the decision's probably limited impact," Erste
Bank said in a note to clients. The forint would likely bounce
back from resistance at 325 to the euro and correct toward
stronger levels, it added.
    Takarekbank analysts said they also expected no change but
on the off-chance of any monetary tightening, the forint could
gain significantly.
    The region's largest economy, Poland, is on a robust course
despite recent weaker retail sales data, mbank said in a
research note. 
    Poland on Monday reported annual retail sales growth slowed
to 7.3% in May from 13.6% in April, somewhat below analyst
forecasts.
    These numbers "don't change the general positive picture of
the Polish economy," mbank said. "The fact that (major) central
banks are easing monetary policy should in the longer term
strengthen the zloty."
    "In the coming days though the zloty should remain stable;
bigger moves can only be expected on Friday after data on
inflation or information from the G20 summit."
    The region's stocks followed a weakening in emerging markets
as uncertainty weighed ahead of a Trump-Xi meeting at the G20
Summit.            
    

            CEE        SNAPSHOT   AT                         
            MARKETS              1037 CET            
                       CURRENCI                              
                       ES                            
                       Latest    Previous  Daily     Change
                       bid       close     change    in 2019
 Czech                  25.5580   25.5750    +0.07%    +0.58%
 crown                                               
 Hungary               324.2000  323.4500    -0.23%    -0.96%
 forint                                              
 Polish                  4.2560    4.2535    -0.06%    +0.79%
 zloty                                               
 Romanian                4.7210    4.7229    +0.04%    -1.42%
 leu                                                 
 Croatian                7.3960    7.3973    +0.02%    +0.19%
 kuna                                                
 Serbian               117.7700  117.8300    +0.05%    +0.45%
 dinar                                               
 Note:      calculated from                1800 CET          
 daily                                               
 change                                              
                                                             
                       Latest    Previous  Daily     Change
                                 close     change    in 2019
 Prague                 1046.86  1056.180    -0.88%    +6.11%
                                        0            
 Budapest              40360.72  40475.09    -0.28%    +3.12%
 Warsaw                 2320.79   2331.08    -0.44%    +1.94%
 Bucharest              8634.35   8625.92    +0.10%   +16.94%
 Ljubljana               890.23    890.23    +0.00%   +10.69%
 Zagreb                 1905.02   1905.02    +0.00%    +8.93%
 Belgrade   <.BELEX15    720.44    720.44    +0.00%    -5.42%
            >                                        
 Sofia                   577.50    580.11    -0.45%    -2.85%
                       BONDS                                 
                       Yield     Yield     Spread    Daily
                       (bid)     change    vs Bund   change
                                                     in
 Czech                                               spread
 Republic                                            
   2-year   <CZ2YT=RR    1.5820    0.0980   +231bps     +9bps
            >                                        
   5-year   <CZ5YT=RR    1.3390    0.0190   +199bps     +2bps
            >                                        
   10-year  <CZ10YT=R    1.5260    0.0040   +184bps     +1bps
            R>                                       
 Poland                                                      
   2-year   <PL2YT=RR    1.5770   -0.0310   +230bps     -4bps
            >                                        
   5-year   <PL5YT=RR    1.9200   -0.0360   +257bps     -4bps
            >                                        
   10-year  <PL10YT=R    2.3390   -0.0200   +265bps     -1bps
            R>                                       
            FORWARD    RATE      AGREEMEN                    
                                 T                   
                       3x6       6x9       9x12      3M
                                                     interban
                                                     k
 Czech Rep          <      2.18      2.08      1.99      2.17
            PRIBOR=>                                 
 Hungary            <      0.31      0.43      0.53      0.24
            BUBOR=>                                  
 Poland             <      1.74      1.73      1.71      1.72
            WIBOR=>                                  
 Note: FRA  are for ask prices                               
 quotes                                              
 **************************************************          
 ************                                        
 
 (Reporting by Marton Dunai; Editing by Andrew Heavens)
  
 
 
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