August 23, 2017 / 9:56 AM / a month ago

CEE MARKETS-Forint tests 27-month high

    * Hungarian central bank makes no effort to talk down forint
    * Regional central banks await rate clues from Fed, ECB

    By Sandor Peto
    BUDAPEST, Aug 23 (Reuters) - Hungary's forint
tested 27-month highs against the euro on Wednesday after
Central Europe's most dovish central bank made no attempt to
talk it down after its meeting on Tuesday.
    More than five years since the previous central bank rate
increase within the European Union, the Czech central bank (CNB)
this month lifted its record-low main rate.
    Other banks in the east of the bloc are unlikely to follow
the CNB's move any time soon, however. The CNB had the lowest
inflation target in the region at 2 percent and the jury is
still out on whether inflation targets across the region are 
threatened by generally robust growth.
    Tuesday's statement from the National Bank of Hungary (NBH),
which analysts expect to keep rates on hold for years, left some
market participants puzzled over the course of the forint.
    Without any NBH efforts to talk it down from its recent
strong levels, the currency firmed to 303.06 against the euro
early on Wednesday before retreating to 303.27 by 0837 GMT.   
    Nomura analyst Peter Attard Montalto said in a note that
subtle changes in the language of Tuesday's NBH statement may
herald further monetary loosening at its next meeting in
September when it also releases quarterly economic forecasts.
    The central bank notred that good macroeconomic data had
generally strengthened Central European currencies.
    "But they know that a firming in the summer time is a
temporary, though natural, process, with markets illiquid," said
ING analyst Peter Virovacz. "They will wait for their Sept. 19
meeting. By then the Fed and the ECB may shed more clarity on
their intentions."
    The analyst added that a cut in the bank's overnight deposit
rate, which stands at -0.05 percent, could be a sufficiently
strong response if the forint firms towards the 300 line.
    Central European assets were rangebound across the board in
thin trade.
    The crown firmed 0.1 percent to 26.084 against the
euro, but Monday's announcement that the government will not
sell Treasury bills in September could herald a crown weakening,
Raiffeisen analyst Stephan Imre said in a note.    
    Big Treasury bill expiries in the coming weeks may cause a
crown sell-off by foreign investors who bought huge amounts of
the Czech currency before the CNB in April removed a cap that
had kept the crown weaker than 27 against the euro for years.
    "Thursday's T-bills auction might become the last
possibility for T-bill investments in Q3 and should therefore
meet healthy demand," Imre said. 
       
               CEE MARKETS  SNAPSH   AT  1037 CET         
                            OT                      
                            CURRENCIES                    
                            Latest  Previo  Daily   Change
                                    us              
                            bid     close   change  in
                                                    2017
 Czech crown                26.084  26.104   +0.08   3.54%
                                 0       5       %  
 Hungary                    303.27  303.34   +0.02   1.83%
 forint                         00      50       %  
 Polish zloty               4.2759  4.2758   +0.00   2.99%
                                                 %  
 Romanian leu               4.5846  4.5855   +0.02  -1.08%
                                                 %  
 Croatian                   7.4030  7.4045   +0.02   2.05%
 kuna                                            %  
 Serbian                    119.23  119.41   +0.15   3.46%
 dinar                          00      00       %  
 Note: daily   calculated   previo  close   1800          
 change        from         us      at      CET     
                            STOCKS                        
                            Latest  Previo  Daily   Change
                                    us              
                                    close   change  in
                                                    2017
 Prague                     1035.0  1033.7   +0.13   +12.3
                                 4       3       %      1%
 Budapest                   37512.  37622.  -0.29%   +17.2
                                90      47              2%
 Warsaw                     2388.1  2387.2   +0.04   +22.6
                                 8       4       %      0%
 Bucharest                  8341.6  8351.5  -0.12%   +17.7
                                 5       8              4%
 Ljubljana                  815.96  816.59  -0.08%   +13.7
                                                        1%
 Zagreb                     1898.9  1901.6  -0.14%  -4.81%
                                 7       7          
 Belgrade                   724.04  722.78   +0.17   +0.93
                                                 %       %
 Sofia                      722.12  719.67   +0.34   +23.1
                                                 %      4%
                            BONDS                         
                            Yield   Yield   Spread  Daily
                            (bid)   change  vs      change
                                            Bund    in
 Czech                                              spread
 Republic                                           
   2-year                    0.011   0.037   +072b   +3bps
                                                ps  
   5-year                    0.077   0.045   +035b   +3bps
                                                ps  
   10-year                   0.902    0.02   +049b   +1bps
                                                ps  
 Poland                                                   
   2-year                    1.775       0   +249b   -1bps
                                                ps  
   5-year                    2.663   0.011   +294b   -1bps
                                                ps  
   10-year                   3.343   0.019   +293b   +1bps
                                                ps  
               FORWARD      RATE    AGREEMENT             
                            3x6     6x9     9x12    3M
                                                    interb
                                                    ank
 Czech Rep             <PR     0.6     0.7     0.8       0
               IBOR=>                               
 Hungary               <BU    0.22   0.275    0.34    0.15
               BOR=>                                
 Poland                <WI    1.77    1.81    1.86    1.73
               BOR=>                                
 Note: FRA     are for ask                                
 quotes        prices                               
 *********************************************************
 *****
 
 (Reporting by Sandor Peto; Editing by David Goodman)
  
 
 

Our Standards:The Thomson Reuters Trust Principles.
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