November 21, 2019 / 10:45 AM / 14 days ago

CEE MARKETS-After bounce forint heads lower, other regional currencies hold firm

    By Gergely Szakacs
    BUDAPEST, Nov 21 (Reuters) - The Hungarian forint
eased on Thursday, giving back some of the gains posted in a
short-lived bounce following the central bank's decision earlier
this week to keep interest rates on hold.
    Central Europe's worst-performing currency, which has lost
nearly 4% of its value versus the euro this year, firmed nearly
1% from around record lows at the 336 mark after Tuesday's
central bank meeting.
    But the currency, pressured by weak global sentiment as
Britain's uncertain departure from the European Union and
back-and-forth in the U.S.-China trade dispute rattle investors,
has been drifting to weaker levels since.
    At 1017 GMT, it was 0.2% weaker than Wednesday's local
close, underperforming its central European peers, which were
mildly stronger or unchanged.
    "I would expect the forint to remain on a weaker footing,"
said a currency dealer in Budapest. "It has been in a weakening
channel since the start of the year. Now it sits bang in the
middle of that channel.
    "Tuesday's move was the correction of the previous rapid
weakening to 335 per euro from the 328 level," the trader said.
    
    In contrast, the Czech crown led the region with a
0.2% gain, testing the strong side of the psychological 25.50
level in low turnover.
    "The crown is stuck to the level of 25.50 and is cautiously
trying to test this stronger technical level," economists at
CSOB said in a note.
    "Given growing global tensions it will be difficult. Help
could come with euro zone PMI at the end of the week, assuming
it confirms light improvement."
    Major regional stock markets were in the red, with Warsaw
stocks shedding 0.8% and the Budapest Stock Exchange also
retreating from a record-high hit earlier this week.
    Later on Thursday Romania will auction 1-year bills and 2031
government bonds, which analysts at ING said would attract good
demand.
    "The target amounts are small and should be filled without
major yield concessions," ING said.
                   CEE      SNAPSHO   AT                      
                   MARKETS  T        1117              
                                     CET               
                            CURRENC                           
                            IES                        
                            Latest   Previou  Daily    Change
                                     s                 
                            bid      close    change   in 2019
 EURCZK  Czech     <EURCZK  25.5000  25.5400   +0.16%   +0.81%
 =       crown     =>                                  
 EURHUF  Hungary   <EURHUF  333.750  333.110   -0.19%   -3.79%
 =       forint    =>             0        0           
 EURPLN  Polish    <EURPLN   4.2950   4.2950   +0.00%   -0.13%
 =       zloty     =>                                  
 EURRON  Romanian  <EURRON   4.7810   4.7835   +0.05%   -2.66%
 =       leu       =>                                  
 EURHRK  Croatian  <EURHRK   7.4370   7.4405   +0.05%   -0.36%
 =       kuna      =>                                  
 EURRSD  Serbian   <EURRSD  117.450  117.620   +0.14%   +0.72%
 =       dinar     =>             0        0           
         Note:     calculated from            1800            
         daily                                CET      
         change                                        
                                                              
                            Latest   Previou  Daily    Change
                                     s                 
                                     close    change   in 2019
 .PX     Prague             1072.44  1078.34   -0.55%   +8.70%
                                          00           
 .BUX    Budapest           43602.4  43938.9   -0.77%   +11.40
                                  5        0                 %
 .WIG20  Warsaw    <.WIG20  2177.36  2194.58   -0.78%   -4.36%
                   >                                   
 .BETI   Buchares           9713.99  9732.22   -0.19%   +31.56
         t                                                   %
 .SBITO  Ljubljan  <.SBITO   888.71   884.14   +0.52%   +10.50
 P       a         P>                                        %
 .CRBEX  Zagreb    <.CRBEX  1993.38  1994.61   -0.06%   +13.98
                   >                                         %
 .BELEX  Belgrade  <.BELEX   764.66   764.08   +0.08%   +0.39%
 15                15>                                 
 .SOFIX  Sofia     <.SOFIX   551.00   550.98   +0.00%   -7.31%
                   >                                   
                            BONDS                             
                            Yield    Yield    Spread   Daily
                            (bid)    change   vs Bund  change
                                                       in
         Czech                                         spread
         Republic                                      
 CZ2YT=    2-year  <CZ2YT=   1.3820  -0.0160   +202bp    -2bps
 RR                RR>                              s  
 CZ5YT=    5-year  <CZ5YT=   1.2700   0.0460   +186bp    +3bps
 RR                RR>                              s  
 CZ10YT            <CZ10YT   1.4940   0.0170   +183bp    +0bps
 =RR     10-year   =RR>                             s  
         Poland                                               
 PL2YT=    2-year  <PL2YT=   1.3930  -0.0070   +203bp    -2bps
 RR                RR>                              s  
 PL5YT=    5-year  <PL5YT=   1.8280   0.0220   +242bp    +1bps
 RR                RR>                              s  
 PL10YT            <PL10YT   2.0830   0.0280   +242bp    +1bps
 =RR     10-year   =RR>                             s  
                   FORWARD  RATE     AGREEME                  
                                     NT                
                            3x6      6x9      9x12     3M
                                                       interba
                                                       nk
         Czech     <CZKFRA     2.26     2.25     2.20     2.18
         Rep       ><PRIBO                             
                   R=>                                 
         Hungary   <HUFFRA     0.23     0.28     0.31     0.19
                   ><BUBOR                             
                   =>                                  
         Poland    <PLNFRA     1.73     1.71     1.68     1.71
                   ><WIBOR                             
                   =>                                  
         Note:     are for ask                                
         FRA       prices                              
         quotes                                        
 
    
 (Additional reporting by Jason Hovet in PRAGUE and Radu-Sorin
Marinas in BUCHAREST
Editing by Gareth Jones)
  
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