October 25, 2019 / 9:41 AM / 18 days ago

CEE MARKETS-FX mildly stronger, Czech crown stabilises after falls

    BUDAPEST, Oct 25 (Reuters) - Central European currencies
were mildly stronger on Friday, regaining some of the ground
lost in the previous session on weak European activity data, but
the prospect of an economic slowdown kept a lid on further
gains.
    At 0853 GMT, most central European currencies were a shade
stronger, with the Hungarian forint and the Polish
zloty leading the region with a 0.1% gain. The Czech
crown was unchanged in morning trade.
    Hungarian Prime Minister Viktor Orban has flagged further
stimulus measures in response to weakness in the euro zone, its
main trading partner, where business activity barely expanded in
October according to a fresh survey.
    A currency dealer in Budapest said expectations by some
players for a positive step by Moody's, which will review
Hungary's credit rating later on Friday, lent some support to
the forint, which has underperformed its peers this year.
    "The rating agency currently ranks (Hungary) at the bottom
of the investment-grade category with a stable outlook," local
brokerage Erste Investment said in a note.
    "If we take into account that the other two major credit
rating agencies have upgraded Hungary this year, an outlook
change by Moody's may also come into play."
    Erste Investment added, however, that after the forint's
recent gains, which saw the currency drift away from its
September record-lows versus the euro, its 100-day moving
average at the 328 per euro mark posed an obstacle to further
gains.
    The crown stabilised around 25.60 per euro after
falling 0.4% on Wednesday, as central bank vice-governor Marek
Mora was quoted by Bloomberg as saying the arguments for an
interest rate hike have weakened since the last meeting.
    "It seems not even the dovish tone of the CNB has hurt the
currency. It is still significantly weaker than the central
bank's forecast model assumed, however, (at this next meeting)
it will stay on the back burner," economists at CSOB said.
    "The domestic economy is not showing the best signs and
risks and uncertainties abroad are not disappearing," the
analysts said. "It still looks like the best scenario will be
wait-and-see. After all there is nowhere (in rates) to hurry."

                   CEE      SNAPSHO   AT                      
                   MARKETS  T        1053              
                                     CET               
                            CURRENC                           
                            IES                        
                            Latest   Previou  Daily    Change
                                     s                 
                            bid      close    change   in 2019
 EURCZK  Czech     <EURCZK  25.5980  25.5930   -0.02%   +0.43%
 =       crown     =>                                  
 EURHUF  Hungary   <EURHUF  329.010  329.410   +0.12%   -2.41%
 =       forint    =>             0        0           
 EURPLN  Polish    <EURPLN   4.2745   4.2799   +0.13%   +0.35%
 =       zloty     =>                                  
 EURRON  Romanian  <EURRON   4.7555   4.7575   +0.04%   -2.13%
 =       leu       =>                                  
 EURHRK  Croatian  <EURHRK   7.4500   7.4500   +0.00%   -0.54%
 =       kuna      =>                                  
 EURRSD  Serbian   <EURRSD  117.460  117.570   +0.09%   +0.72%
 =       dinar     =>             0        0           
         Note:     calculated from            1800            
         daily                                CET      
         change                                        
                                                              
                            Latest   Previou  Daily    Change
                                     s                 
                                     close    change   in 2019
 .PX     Prague             1062.95  1067.14   -0.39%   +7.74%
                                          00           
 .BUX    Budapest           42368.5  42475.5   -0.25%   +8.25%
                                  0        3           
 .WIG20  Warsaw    <.WIG20  2187.36  2208.36   -0.95%   -3.92%
                   >                                   
 .BETI   Buchares           9637.72  9621.88   +0.16%   +30.53
         t                                                   %
 .SBITO  Ljubljan  <.SBITO   867.45   873.73   -0.72%   +7.86%
 P       a         P>                                  
 .CRBEX  Zagreb    <.CRBEX  2018.91  2020.90   -0.10%   +15.44
                   >                                         %
 .BELEX  Belgrade  <.BELEX   752.74   752.74   +0.00%   -1.18%
 15                15>                                 
 .SOFIX  Sofia     <.SOFIX   562.83   561.00   +0.33%   -5.32%
                   >                                   
                            BONDS                             
                            Yield    Yield    Spread   Daily
                            (bid)    change   vs Bund  change
                                                       in
         Czech                                         spread
         Republic                                      
 CZ2YT=    2-year  <CZ2YT=   1.3140   0.0790   +197bp    +8bps
 RR                RR>                              s  
 CZ5YT=    5-year  <CZ5YT=   1.0710   0.0200   +170bp    +0bps
 RR                RR>                              s  
 CZ10YT            <CZ10YT   1.3860   0.0150   +177bp    -1bps
 =RR     10-year   =RR>                             s  
         Poland                                               
 PL2YT=    2-year  <PL2YT=   1.4870  -0.0180   +215bp    -2bps
 RR                RR>                              s  
 PL5YT=    5-year  <PL5YT=   1.7400   0.0210   +237bp    +1bps
 RR                RR>                              s  
 PL10YT            <PL10YT   2.0030   0.0200   +239bp    +0bps
 =RR     10-year   =RR>                             s  
                   FORWARD  RATE     AGREEME                  
                                     NT                
                            3x6      6x9      9x12     3M
                                                       interba
                                                       nk
         Czech     <CZKFRA     2.20     2.17     2.06     2.18
         Rep       ><PRIBO                             
                   R=>                                 
         Hungary   <HUFFRA     0.29     0.33     0.31     0.21
                   ><BUBOR                             
                   =>                                  
         Poland    <PLNFRA     1.74     1.70     1.67     1.72
                   ><WIBOR                             
                   =>                                  
         Note:     are for ask                                
         FRA       prices                              
         quotes                                        
 
 (Reporting by Gergely Szakacs and Jason Hovet
Editing by Jacqueline Wong)
  
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