July 20, 2020 / 9:46 AM / 19 days ago

CEE MARKETS-Stocks mixed as EU leaders struggle to strike stimulus deal

    By Anita Komuves
    BUDAPEST, July 20 (Reuters) - Central European stocks were
mixed on Monday and currencies were little changed as investors
watched EU leaders struggle to strike a deal on a coronavirus
recovery fund at a summit that has been dragging on since
Friday.
    Signs emerged on Monday that leaders of northern European
Union countries were willing to compromise on how to carve up
the recovery fund. The meeting was adjourned on Monday until
1400 GMT.
    "Markets expect a deal, and if it does not happen, that
could mess things up," an FX trader in Budapest said.
    "Besides, the Hungarian forint could be moved by what
happens at the central bank meeting tomorrow, and markets will
be watching whether the NBH touches any of its other tools
besides the base rate," he added.
    The bank is expected to cut its base rate by 15 basis points
to 0.6% at the meeting, according to a Reuters poll of
analysts.
    The forint was up 0.3%, trading at 352.40 to the
euro. 
    Elsewhere, the Czech crown edged up 0.04% to
26.625 to the euro while the Romanian leu was little
changed. The Polish zloty was up 0.1% on Monday,
trading at 4.474 to the euro.
    Poland's inflation may exceed the central bank's latest
forecasts, which could prompt its rate-setting panel to consider
a rate hike, central banker Lukasz Hardt said on Monday. June
inflation at 3.3% was above forecasts.
    The central bank, which has cut rates thrice to almost zero
this year said in its inflation projection last week that it
expected the consumer price index to fall to 1.5% in 2021 from
3.3% seen this year.
    "NBP has cut rates significantly because of fear of
deflation," Commerzbank said in a note. "This does not build up
to a supportive picture for the zloty exchange rate for the
coming months."
    Warsaw's shares gained 0.6%, Budapest was
largely flat and Prague slipped 0.3%. Bucharest's stocks
 were up 0.12%.
    
            CEE        SNAPSHOT    AT  1012                     
            MARKETS               CET                   
                       CURRENCIE                                
                       S                                
                       Latest     Previous    Daily     Change
                       bid        close       change    in 2020
 Czech                   26.6250     26.6350    +0.04%    -4.48%
 crown                                                  
 Hungary                352.4000    353.4800    +0.31%    -6.03%
 forint                                                 
 Polish                   4.4740      4.4784    +0.10%    -4.86%
 zloty                                                  
 Romanian                 4.8425      4.8420    -0.01%    -1.12%
 leu                                                    
 Croatian                 7.5285      7.5395    +0.15%    -1.10%
 kuna                                                   
 Serbian                117.5700    117.5950    +0.02%    +0.00%
 dinar                                                  
 Note:      calculated from                   1800 CET          
 daily                                                  
 change                                                 
                                                                
                       Latest     Previous    Daily     Change
                                  close       change    in 2020
 Prague                   945.92    949.0300    -0.33%   -15.21%
 Budapest              35,220.19   35,200.88    +0.05%   -23.57%
 Warsaw                 1,806.63    1,796.04    +0.59%   -15.97%
 Bucharest              8,522.40    8,511.80    +0.12%   -14.58%
 Ljubljana                870.47      871.46    -0.11%    -5.98%
 Zagreb                 1,601.89    1,606.03    -0.26%   -20.60%
 Belgrade   <.BELEX15     658.88      658.49    +0.06%   -17.81%
            >                                           
 Sofia                    442.03      442.27    -0.05%   -22.20%
                                                                
                       Yield      Yield       Spread    Daily
                       (bid)      change      vs Bund   change
                                                        in
 Czech                                                  spread
 Republic                                               
   2-year   <CZ2YT=RR     0.1430      0.0890   +081bps     +8bps
            >                                           
   5-year   <CZ5YT=RR     0.4380      0.0130   +108bps     +0bps
            >                                           
   10-year  <CZ10YT=R     0.9350      0.0350   +137bps     +2bps
            R>                                          
 Poland                                                         
   2-year   <PL2YT=RR     0.1270      0.0030   +079bps     +0bps
            >                                           
   5-year   <PL5YT=RR     0.7590     -0.0030   +140bps     -2bps
            >                                           
   10-year  <PL10YT=R     1.3290      0.0100   +177bps     +0bps
            R>                                          
            FORWARD                                             
                       3x6        6x9         9x12      3M
                                                        interban
                                                        k
 Czech Rep          <       0.31        0.32      0.34      0.34
            PRIBOR=>                                    
 Hungary            <       0.63        0.58      0.56      0.70
            BUBOR=>                                     
 Poland             <       0.21        0.22      0.23      0.25
            WIBOR=>                                     
 Note: FRA  are for ask prices                                  
 quotes                                                 
 *****************************************************          
 *********                                              
 

 (Reporting by Anita Komuves in Budapest; Additional reporting
by Luiza Ilie in Bucharest; Editing by Vinay Dwivedi)
  
 
 
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