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United Kingdom

Anita Komuves

CEE MARKETS-Stocks fall, forint plunges to five-month low as coronavirus worries rise

21 Sep 2020

By Anita Komuves BUDAPEST, Sept 21 Stocks and currencies in Central Europe fell on Monday with the Hungarian forint leading losses and plunging to a five-month low versus the euro as a second wave of coronavirus infections renewed investors' worries. The forint fell 0.72% to 362.60 versus the euro with markets also looking to the Hungarian central bank's rate-setting meeting on Tuesday when it will publish new economic forecasts, including a likely sharp downgrade to its 2020 GDP outlook. The NBH is likely to leave interest rates unchanged at 0.6%, a Reuters poll of economists said. "All emerging currencies that were hit hard in the first wave of the pandemic started weakening again," a Budapest-based trader said. "The forint is at its weakest since April." Elsewhere, the Polish zloty was 0.48% weaker, trading at 4.4786 versus the common currency. The Czech crown fell 0.63% to 26.895 per euro, the lowest since the end of June. "We are continuing with the same negative sentiment, and there is a lack of liquidity," a Prague dealer said. Regional stock markets were also being battered by the global negative sentiment as coronavirus cases rise. Budapest's equities led losses, down 2.13%, with OTP Bank's shares dropping 3.3% by 0855 GMT. Shares of the bank fell after Prime Minister Viktor Orban announced on Saturday that Hungary would extend a moratorium on loan repayments for some households and companies until the middle of 2021. Prague's blue chip index fell 1.64% while Warsaw's equities were down 0.58%. Romania's bluechip index fell 0.72% despite the Bucharest Stock Exchange being upgraded to "secondary emerging market" status from "frontier" by FTSE Russell, which analysts expect to lead to an influx of capital. The upgrade is overshadowed by concerns that Romanian lawmakers will approve a bigger pension hike than the budget can sustain ahead of elections. The same concerns are keeping a lid on the leu, which was flat on Monday. CEE SNAPSHO AT MARKETS T 1039 CET CURRENC IES Latest Previous Daily Change bid close change in 2020 EURCZK= Czech <EURCZK= 26.8950 26.7250 -0.63% -5.44% crown > EURHUF= Hungary <EURHUF= 362.600 360.0000 -0.72% -8.67% forint > 0 EURPLN= Polish <EURPLN= 4.4786 4.4573 -0.48% -4.96% zloty > EURRON= Romanian <EURRON= 4.8590 4.8580 -0.02% -1.46% leu > EURHRK= Croatian <EURHRK= 7.5420 7.5425 +0.01 -1.28% kuna > % EURRSD= Serbian <EURRSD= 117.480 117.5800 +0.09 +0.08 dinar > 0 % % Note: calculated from 1800 daily CET change Latest Previous Daily Change close change in 2020 .PX Prague 859.35 873.6600 -1.64% -22.97 % .BUX Budapest 32874.8 33591.51 -2.13% -28.66 2 % .WIG20 Warsaw 1721.77 1731.76 -0.58% -19.92 % .BETI Bucharest 9050.39 9115.88 -0.72% -9.29% .SBITOP Ljubljana <.SBITOP 846.07 837.93 +0.97 -8.62% > % .CRBEX Zagreb 1608.76 1612.09 -0.21% -20.26 % .BELEX1 Belgrade <.BELEX1 686.58 688.45 -0.27% -14.36 5 5> % .SOFIX Sofia 423.55 424.97 -0.33% -25.45 % Yield Yield Spread Daily (bid) change vs change Bund in Czech spread Republic CZ2YT=R 2-year <CZ2YT=R 0.1550 -0.0250 +086b -1bps R R> ps CZ5YT=R 5-year <CZ5YT=R 0.5680 -0.0570 +127b -4bps R R> ps CZ10YT= 10-year <CZ10YT= 0.8730 -0.0890 +138b -6bps RR RR> ps Poland PL2YT=R 2-year <PL2YT=R 0.0220 -0.0120 +072b +0bps R R> ps PL5YT=R 5-year <PL5YT=R 0.6600 -0.0210 +137b +0bps R R> ps PL10YT= 10-year <PL10YT= 1.3410 -0.0110 +185b +2bps RR RR> ps FORWARD 3x6 6x9 9x12 3M interb ank Czech Rep 0.34 0.34 0.36 0.34 <PRIBOR= > Hungary 0.75 0.79 0.84 0.63 Poland 0.21 0.19 0.18 0.23 Note: FRA are for ask quotes prices ********************************************** **************** (Additional reporting by Luiza Ilie in Bucharest and Jason Hovet in Prague; Editing by Kirsten Donovan)

CEE MARKETS-Stocks, currencies fall as rising virus cases weigh

18 Sep 2020

By Anita Komuves BUDAPEST, Sept 18 Most Central European stock markets and currencies slid on Friday, as rising coronavirus cases both globally and in the region, with Hungary and the Czech Republic reporting record numbers of new infections, weighed on investor sentiment. Instead of lockdowns earlier that led to massive economic contractions, governments in the region are tightening mask-wearing rules and curtailing opening hours of bars and restaurants. The Czech Republic reported more than 3,000 cases in a single day on Friday. The country has seen one of the biggest spikes in new coronavirus infections in Europe. Hungary also reported its highest ever daily tally of 941 infections. Meanwhile, the crown, under pressure from pandemic worries in recent days, firmed 0.21% and was trading at 26.675 versus the common currency, as it was getting some technical bounce from recent lows hit earlier this week. The forint slid 0.15% to 360.95 per euro as markets were also eyeing the central bank's rate-setting meeting next Tuesday when it will also publish its next inflation report. The NBH is likely to leave interest rates unchanged at 0.6%, a Reuters poll of economists said. "The market could be paying special attention to how the NBH's communication reacts to higher-than-expected inflation data," CIB Bank said in a note. "The central bank will have to walk a fine line between keeping the credibility of the inflation target, protecting the forint and supporting the economy." Hungary's central bank announced the details of its first euro/forint foreign exchange swap tender providing euro liquidity on Friday. The measure was announced earlier this month in order to reduce volatility in the domestic forex swap market. Elsewhere, the Romanian leu was little moved and the Polish zloty edged down 0.07% at 4.4555 per euro. Most stocks in the region were down, with Budapest leading losses as it weakened 0.57%. Prague lost 0.42% and Warsaw was down 0.22%. Bucharest bucked the trend and was up 0.27%. CEE SNAPSHO AT MARKETS T 1057 CET CURRENC IES Latest Previous Daily Change bid close change in 2020 EURCZK= Czech <EURCZK 26.6750 26.7300 +0.21 -4.66% crown => % EURHUF= Hungary <EURHUF 360.950 360.4200 -0.15% -8.26% forint => 0 EURPLN= Polish <EURPLN 4.4555 4.4525 -0.07% -4.47% zloty => EURRON= Romanian <EURRON 4.8595 4.8592 -0.01% -1.47% leu => EURHRK= Croatian <EURHRK 7.5380 7.5413 +0.04 -1.23% kuna => % EURRSD= Serbian <EURRSD 117.590 117.5800 -0.01% -0.02% dinar => 0 Note: calculated from 1800 daily CET change Latest Previous Daily Change close change in 2020 .PX Prague 879.88 883.6300 -0.42% -21.13% .BUX Budapest 33694.6 33886.79 -0.57% -26.88% 6 .WIG20 Warsaw <.WIG20 1741.86 1745.73 -0.22% -18.99% > .BETI Bucharest 9235.59 9210.62 +0.27 -7.43% % .SBITOP Ljubljana <.SBITO 842.07 839.82 +0.27 -9.05% P> % .CRBEX Zagreb <.CRBEX 1611.71 1610.57 +0.07 -20.11% > % .BELEX1 Belgrade <.BELEX 683.81 689.21 -0.78% -14.70% 5 15> .SOFIX Sofia <.SOFIX 429.89 429.60 +0.07 -24.33% > % Yield Yield Spread Daily (bid) change vs change Bund in Czech spread Republic CZ2YT=R 2-year <CZ2YT= 0.1660 -0.0440 +086b -4bps R RR> ps CZ5YT=R 5-year <CZ5YT= 0.5840 -0.0670 +128b -7bps R RR> ps CZ10YT= 10-year <CZ10YT 0.9620 -0.0620 +145b -6bps RR =RR> ps Poland PL2YT=R 2-year <PL2YT= 0.0450 -0.0190 +074b -2bps R RR> ps PL5YT=R 5-year <PL5YT= 0.6720 -0.0210 +136b -2bps R RR> ps PL10YT= 10-year <PL10YT 1.3640 -0.0070 +185b -1bps RR =RR> ps FORWARD 3x6 6x9 9x12 3M interba nk Czech Rep <CZKFRA 0.35 0.35 0.39 0.34 ><PRIBO R=> Hungary <HUFFRA 0.75 0.79 0.84 0.63 ><BUBOR => Poland <PLNFRA 0.22 0.20 0.20 0.23 ><WIBOR => Note: FRA are for ask quotes prices ********************************************* ***************** (Additional reporting by Jason Hovet in Prague; Editing by Rashmi Aich)

CEE MARKETS-Currencies, stocks drift ahead of Fed policy announcement

16 Sep 2020

By Anita Komuves BUDAPEST, Sept 16 Most Central European currencies and stock markets moved sideways on Wednesday, a day after the Polish central bank left its rates unchanged, and as investors awaited the outcome of the U.S. Federal Reserve's policy meeting. The zloty edged up 0.07%, trading at 4.4530 versus the euro a day after Poland's central bank decided to leave its benchmark interest rate unchanged at 0.1%, as expected. The bank said that it saw the economic recovery continuing in the coming months, but that its scale may be limited by the Polish zloty's lack of exchange rate adjustment to the effects of the global pandemic. "While NBP may not be about to take any concrete policy steps to weaken the exchange rate, it is clear which direction it would prefer," Commerzbank said in a note. "The MPC remark acts as a deterrent to long zloty positions." Elsewhere, the Hungarian forint slipped 0.29% and was trading at 358.90 to the euro. "It is a correction, the currency has been strengtening recently and now it retreats a bit in today's thin trade," an FX trader in Budapest said. The Czech crown was steady on Wednesday after hitting a two-month low in the previous session, edging down 0.03% and trading at 26.769 per euro but could remain under pressure due to a rise in novel coronavirus cases. The Czech Republic's daily count of new coronavirus cases rose to 1,677 on Tuesday, the highest on record. The country has seen one of Europe's largest surges in new coronavirus cases in recent weeks. "Sentiment remains poor in view of the current situation with coronavirus," Komercni Banka said in a morning note. The Czech central bank's Vice-Governor Tomas Nidetzky told Bloomberg that the quickening spread of COVID-19 was making the central bank's regular forecast seem "rather optimistic". Nidetzky also said that the bank should keep its benchmark rate steady just above zero for at least a year before considering any tightening. CEE SNAPSHO AT MARKETS T 1100 CET CURRENC IES Latest Previous Daily Change bid close change in 2020 EURCZK= Czech <EURCZK= 26.7690 26.7600 -0.03% -4.99% crown > EURHUF= Hungary <EURHUF= 358.900 357.8600 -0.29% -7.73% forint > 0 EURPLN= Polish <EURPLN= 4.4530 4.4560 +0.07 -4.42% zloty > % EURRON= Romanian <EURRON= 4.8595 4.8576 -0.04% -1.47% leu > EURHRK= Croatian <EURHRK= 7.5395 7.5360 -0.05% -1.25% kuna > EURRSD= Serbian <EURRSD= 117.550 117.5800 +0.03 +0.02% dinar > 0 % Note: calculated from 1800 daily CET change Latest Previous Daily Change close change in 2020 .PX Prague 898.84 898.3300 +0.06 -19.43% % .BUX Budapest 34214.8 34248.86 -0.10% -25.75% 0 .WIG20 Warsaw 1743.00 1743.93 -0.05% -18.93% .BETI Buchares 9305.20 9401.96 -1.03% -6.74% t .SBITOP Ljubljan <.SBITOP 847.66 847.22 +0.05 -8.45% a > % .CRBEX Zagreb 1614.80 1617.08 -0.14% -19.96% .BELEX1 Belgrade <.BELEX1 688.22 690.55 -0.34% -14.15% 5 5> .SOFIX Sofia 429.63 430.66 -0.24% -24.38% Yield Yield Spread Daily (bid) change vs change Bund in Czech spread Republic CZ2YT=R 2-year <CZ2YT=R 0.1800 -0.0250 +087b -3bps R R> ps CZ5YT=R 5-year <CZ5YT=R 0.5930 -0.0750 +128b -8bps R R> ps CZ10YT= <CZ10YT= 1.0360 -0.0440 +152b -5bps RR 10-year RR> ps Poland PL2YT=R 2-year <PL2YT=R 0.0690 0.0080 +076b +1bps R R> ps PL5YT=R 5-year <PL5YT=R 0.6800 -0.0190 +136b -2bps R R> ps PL10YT= <PL10YT= 1.3760 0.0050 +186b +0bps RR 10-year RR> ps FORWARD 3x6 6x9 9x12 3M interba nk Czech 0.35 0.35 0.38 0.34 Rep <PRIBOR= > Hungary 0.74 0.78 0.82 0.63 Poland 0.23 0.20 0.20 0.23 Note: are for ask FRA prices quotes ********************************************* ***************** (Additional reporting by Jason Hovet in Prague; editing by Emelia Sithole-Matarise)

CEE MARKETS-Currencies stable, stocks firm on fresh vaccine hopes

14 Sep 2020

By Anita Komuves BUDAPEST, Sept 14 Central European currencies held stable on Monday, but most stock markets firmed as investors cheered Astrazeneca resuming vaccine trials, while also keeping an eye on a spike in coronavirus cases in the region and government steps around it. "The growing number of (coronavirus) infections and unconvincing stock market performance is keeping the crown on the defensive," CSOB said in a client note. The crown edged down 0.05% on Monday, trading at 26.600 per euro. ​ The Czech Republic has seen one of Europe's largest spikes in COVID-19 cases recently. ​ The Czech government is aiming to avoid mass lockdowns like those seen at the beginning of the pandemic that pushed the economy into a sharp 11% on year contraction in the second quarter. Hungary has also seen a spike in coronavirus cases in the past two weeks, with a record number of 916 new cases on Saturday. Prime Minister Viktor Orban said the government will avoid blanket school closures to help keep the economy going. "The new infections have not affected markets as there are no lockdown measures like before, and nobody expects those to return," a Budapest-based FX-trader said. "The central bank calmed things down (in Hungary) with the foreign currency swap tenders last week. It confirmed that it does not like a euro-forint exchange rate above 360 and the market more or less accepts that." The central bank will hold a swap tender providing euro liquidity on Friday. The NBH added swap tenders providing foreign currency liquidity to its monetary policy toolkit to reduce volatility in the domestic fx swap market. The forint was little moved, down 0.02% and trading at 357.72 versus the common currency. Most stocks in Central Europe followed the global trend and strengthened as AstraZeneca had resumed clinical trials of its COVID-19 vaccine. Bucharest's equities rose 0.6% while Warsaw's stock market was up 0.16%. Pargue's blue chip index firmed 0.07% while Budapest edged down 0.01% by 0856 GMT. CEE SNAPSHO AT MARKETS T 1056 CET CURRENC IES Latest Previous Daily Change bid close change in 2020 EURCZK= Czech <EURCZK= 26.6000 26.5860 -0.05% -4.39% crown > EURHUF= Hungary <EURHUF= 357.720 357.6500 -0.02% -7.43% forint > 0 EURPLN= Polish <EURPLN= 4.4488 4.4498 +0.02 -4.32% zloty > % EURRON= Romanian <EURRON= 4.8570 4.8580 +0.02 -1.41% leu > % EURHRK= Croatian <EURHRK= 7.5360 7.5383 +0.03 -1.20% kuna > % EURRSD= Serbian <EURRSD= 117.480 117.5800 +0.09 +0.08 dinar > 0 % % Note: calculated from 1800 daily CET change Latest Previous Daily Change close change in 2020 .PX Prague 898.37 897.7700 +0.07 -19.47 % % .BUX Budapest 34834.1 34837.99 -0.01% -24.41 4 % .WIG20 Warsaw 1775.80 1772.89 +0.16 -17.41 % % .BETI Bucharest 9358.32 9301.73 +0.61 -6.20% % .SBITOP Ljubljana <.SBITOP 845.59 847.34 -0.21% -8.67% > .CRBEX Zagreb 1608.49 1610.09 -0.10% -20.27 % .BELEX1 Belgrade <.BELEX1 688.28 690.76 -0.36% -14.15 5 5> % .SOFIX Sofia 431.49 431.95 -0.11% -24.05 % Yield Yield Spread Daily (bid) change vs change Bund in Czech spread Republic CZ2YT=R 2-year <CZ2YT=R 0.1970 -0.0110 +090b +0bps R R> ps CZ5YT=R 5-year <CZ5YT=R 0.6140 -0.0920 +131b -8bps R R> ps CZ10YT= 10-year <CZ10YT= 1.0320 -0.0790 +152b -7bps RR RR> ps Poland PL2YT=R 2-year <PL2YT=R 0.0700 -0.0340 +077b -2bps R R> ps PL5YT=R 5-year <PL5YT=R 0.6970 -0.0140 +140b -1bps R R> ps PL10YT= 10-year <PL10YT= 1.3700 -0.0030 +186b +1bps RR RR> ps FORWARD 3x6 6x9 9x12 3M interb ank Czech Rep 0.36 0.36 0.40 0.34 <PRIBOR= > Hungary 0.79 0.86 0.92 0.63 Poland 0.23 0.20 0.21 0.23 Note: FRA are for ask quotes prices ********************************************** **************** (Additional reporting by Jason Hovet in Prague; Editing by Rashmi Aich)

CEE MARKETS-Currencies stable, stocks mixed after ECB meeting

11 Sep 2020

By Anita Komuves BUDAPEST, Sept 11 Most Central European currencies were little moved and stock markets were mixed on Friday, following the European Central Bank's meeting where it kept its policy rates unchanged and said its existing stimulus measures were sufficient. The Hungarian forint held stable, edging up 0.02% and trading at 357.29 per euro. It had recovered from five-month lows after the central bank on Tuesday launched swap tenders for foreign currency liquidity. "The currency strengthened further moderately after the ECB meeting, to under 357, and it is teetering around that level this morning as well," CIB Bank said in a note. "Looking at the past month, the forint is still underperforming the crown or the zloty. We do not expect lasting or significant appreciation soon." Hungary raised 500 million euros ($592 million) from Samurai bonds in the Japanese market, the Hungarian Finance Ministry said on Friday. Hungary's budget deficit could reach 7% to 9% of GDP this year due to the recession and costs linked to the COVID-19 crisis, which has forced the debt agency to boost issuance. Hungary recorded 718 new coronavirus cases on Friday, the highest daily tally to date. Elsewhere, the Czech crown firmed 0.12% to 26.5450 per euro, while the Romanian leu and the Polish zloty were little moved. Markets in Poland are eyeing Moody's rating decision, to be announced later on Monday, after markets close. "Probably the rating and the outlook will be maintained, although the rhetoric may be tightened, meaning stabilisation of the EUR / PLN rate remains the base scenario," Bank Millennium wrote in a client note. Stock markets in the region were mixed, with Warsaw's main index up 0.52% and Bucharest's blue chip index firming 1.27%. Budapest was down 0.51% while Prague's stocks weakened 0.78%. CEE SNAPSHO AT MARKETS T 1041 CET CURRENC IES Latest Previous Daily Change bid close change in 2020 EURCZK= Czech <EURCZK= 26.5450 26.5780 +0.12 -4.19% crown > % EURHUF= Hungary <EURHUF= 357.290 357.3500 +0.02 -7.32% forint > 0 % EURPLN= Polish <EURPLN= 4.4540 4.4540 +0.00 -4.44% zloty > % EURRON= Romanian <EURRON= 4.8575 4.8595 +0.04 -1.42% leu > % EURHRK= Croatian <EURHRK= 7.5390 7.5365 -0.03% -1.24% kuna > EURRSD= Serbian <EURRSD= 117.480 117.5700 +0.08 +0.08% dinar > 0 % Note: calculated from 1800 daily CET change Latest Previous Daily Change close change in 2020 .PX Prague 897.59 904.6900 -0.78% -19.54% .BUX Budapest 34681.2 34858.03 -0.51% -24.74% 8 .WIG20 Warsaw 1774.05 1764.86 +0.52 -17.49% % .BETI Buchares 9275.64 9159.00 +1.27 -7.03% t % .SBITOP Ljubljan <.SBITOP 840.96 841.47 -0.06% -9.17% a > .CRBEX Zagreb 1605.10 1606.54 -0.09% -20.44% .BELEX1 Belgrade <.BELEX1 688.80 690.81 -0.29% -14.08% 5 5> .SOFIX Sofia 430.36 430.51 -0.03% -24.25% Yield Yield Spread Daily (bid) change vs change Bund in Czech spread Republic CZ2YT=R 2-year <CZ2YT=R 0.1930 -0.0010 +088b +2bps R R> ps CZ5YT=R 5-year <CZ5YT=R 0.6420 -0.0550 +131b -3bps R R> ps CZ10YT= <CZ10YT= 1.0570 -0.0630 +152b -2bps RR 10-year RR> ps Poland PL2YT=R 2-year <PL2YT=R 0.0810 -0.0320 +077b -1bps R R> ps PL5YT=R 5-year <PL5YT=R 0.6920 -0.0230 +136b +1bps R R> ps PL10YT= <PL10YT= 1.3750 -0.0160 +184b +2bps RR 10-year RR> ps FORWARD 3x6 6x9 9x12 3M interba nk Czech 0.36 0.37 0.41 0.34 Rep <PRIBOR= > Hungary 0.79 0.86 0.92 0.64 Poland 0.21 0.21 0.22 0.23 Note: are for ask FRA prices quotes ********************************************* ***************** (Additional reporting by Alan Charlish in Warsaw; Editing by Kevin Liffey)

CEE MARKETS-Forint firms as cenbank launches swap tenders for FX liquidity

09 Sep 2020

By Anita Komuves BUDAPEST, Sept 9 Most Central European currencies held stable on Wednesday, while the Hungarian forint firmed and recouped some of its losses from earlier this week after the central bank launched swap tenders for foreign currency liquidity. The National Bank of Hungary (NBH) said it had added the tenders to its monetary policy toolkit in order to reduce volatility in the domestic fx swap market. The announcement helped the forint regain some of its losses from last week when it fell to a five-month low, analysts said. The currency was up 0.21%, trading at 358.15 versus the euro on Wednesday. "This step strengthens the forint as commercial banks do not need to buy foreign currency in the market," Equilor wrote. This is an "important message about what could be a tolerance range for the EUR/HUF exchange rate," Erste Bank said in a note. Investors were digesting fresh inflation data that did not immediately have an effect on the forint's exchange rate. Hungarian headline inflation accelerated to an annual 3.9% last month from 3.8% in July. The central bank's tax-adjusted core inflation gauge rose to an annual 4.2% in August. The NBH targets 3% headline inflation with a tolerance band of a percentage point on either side. "These numbers are in line with expectations," David Nemeth, senior analyst at KH Bank wrote, adding that he expects inflation to ease in the last months of this year. Hungary has started marketing a four-tranche Samurai bond offering this week that includes a green portion, IFR reported. Hungary has already issued 3.5 billion euros of foreign currency bonds this year under a 4 billion euro plan as Hungary's budget deficit has grown because of the economic fallout from the coronavirus. The Czech finance ministry holds a bond auction later today, offering 2022, 2027 and 2029 bonds . The ministry has eased up on issuance since the record first-half borrowing. The Czech crown was a touch up, firming 0.04% to 26.5070 per euro. Elsewhere, the Polish zloty firmed 0.09% to 4.4538, while the Romanian leu was little moved. Stocks in the region were mixed, with Budapest's bourse down 0.22% and Bucharest's blue-chip index sliding 0.33%. Warsaw's stocks firmed 0.89%, while Prague edged up 0.03%. CEE SNAPSHO AT MARKETS T 1045 CET CURRENC IES Latest Previous Daily Change bid close change in 2020 EURCZK= Czech 26.5070 26.5180 +0.04 -4.06% crown % EURHUF= Hungary 358.150 358.9000 +0.21 -7.54% forint 0 % EURPLN= Polish 4.4538 4.4580 +0.09 -4.43% zloty % EURRON= Romanian 4.8585 4.8580 -0.01% -1.44% leu EURHRK= Croatian 7.5300 7.5325 +0.03 -1.12% kuna % EURRSD= Serbian 117.550 117.5700 +0.02 +0.02 dinar 0 % % Note: calculated from 1800 daily CET change Latest Previous Daily Change close change in 2020 .PX Prague 903.95 903.6600 +0.03 -18.97 % % .BUX Budapest 34961.0 35037.61 -0.22% -24.13 8 % .WIG20 Warsaw 1749.26 1733.88 +0.89 -18.64 % % .BETI Buchares 9083.65 9114.02 -0.33% -8.96% t .SBITOP Ljubljan 847.70 844.46 +0.38 -8.44% a % .CRBEX Zagreb 1595.98 1593.10 +0.18 -20.89 % % .BELEX1 Belgrade <.BELEX15 688.65 691.45 -0.40% -14.10 5 > % .SOFIX Sofia 434.02 434.26 -0.06% -23.61 % Yield Yield Spread Daily (bid) change vs change Bund in Czech spread Republic CZ2YT=R 2-year <CZ2YT=RR 0.1930 -0.0290 +090b -2bps R > ps CZ5YT=R 5-year <CZ5YT=RR 0.6870 -0.0320 +140b -3bps R > ps CZ10YT= <CZ10YT=R 1.1030 -0.0190 +160b -2bps RR 10-year R> ps Poland PL2YT=R 2-year <PL2YT=RR 0.0980 -0.0300 +080b -2bps R > ps PL5YT=R 5-year <PL5YT=RR 0.6960 -0.0330 +140b -3bps R > ps PL10YT= <PL10YT=R 1.4000 0.0010 +190b +1bps RR 10-year R> ps FORWARD 3x6 6x9 9x12 3M interb ank Czech < 0.37 0.39 0.44 0.34 Rep PRIBOR=> Hungary < 0.82 0.93 0.99 0.62 BUBOR=> Poland < 0.20 0.20 0.19 0.23 WIBOR=> Note: are for ask prices FRA quotes ********************************************** **************** (Additional reporting by Jason Hovet in Prague and Alan Charlish in Warsaw, Editing by Sherry Jacob-Phillips)

CEE MARKETS-Currencies extend losses as dollar firms; all eyes on inflation data

08 Sep 2020

By Anita Komuves BUDAPEST, Sept 8 Central European currencies on Tuesday extended their losses from last week, under pressure from a firmer U.S. dollar and increased risk aversion as investors cautiously awaited fresh inflation data across the region. The Hungarian forint weakened 0.15%, trading at 360.20 per euro, near the five-month lows that it hit last week. "Just like at the end of August, the EUR/HUF exchange rate became oversold, thus, the trend needs a temporary halt before it rises further," Erste Bank said in a note. "The next catalyst could be the inflation data to be published tomorrow." The currency has eased on local factors such as high inflation, worse-than-expected second-quarter GDP data and the dovish policies of the central bank, analysts have said. Hungary's central bank has offered to buy additional amount of government bonds from local lenders at its weekly tender on Tuesday. The bank launched the purchases as part of efforts to shore up the economy hit by the pandemic and has increased its purchases since its last rate meeting in August. The Czech crown was also down 0.14% and was trading at 26.520 versus the euro. The currency was weakened by rising risk aversion, CSOB bank said in a note. Investors will also be eyeing fresh inflation data due to be published on Thursday, the analysts added, which is "is likely to again jump above the bank's interval around its target and be in line with the outlook." "So with the highest likelihood the central bank will not have to meddle with interest rates at its September meeting," CSOB said. Elsewhere, the Polish zloty slid 0.22% to 4.4453 versus the common currency. The zloty has room to strengthen as Poland's economy recovers from the coronavirus crisis faster than previously expected, Prime Minister Mateusz Morawiecki was quoted as saying by Bloomberg news agency. Morawiecki said the current level of the zloty was good for the stability of the economy and the export industry. Stocks in the region were mixed, with Budapest's bourse gaining 0.61% and Bucharest's blue-chip index up 0.66%. Warsaw's stocks were down 0.48%. CEE SNAPSHO AT MARKETS T 1104 CET CURRENC IES Latest Previous Daily Change bid close change in 2020 EURCZK= Czech <EURCZK= 26.5200 26.4830 -0.14% -4.10% crown > EURHUF= Hungary <EURHUF= 360.200 359.6700 -0.15% -8.07% forint > 0 EURPLN= Polish <EURPLN= 4.4453 4.4355 -0.22% -4.25% zloty > EURRON= Romanian <EURRON= 4.8550 4.8555 +0.01 -1.37% leu > % EURHRK= Croatian <EURHRK= 7.5340 7.5350 +0.01 -1.18% kuna > % EURRSD= Serbian <EURRSD= 117.470 117.6000 +0.11 +0.09 dinar > 0 % % Note: calculated from 1800 daily CET change Latest Previous Daily Change close change in 2020 .PX Prague 908.58 909.1700 -0.06% -18.56 % .BUX Budapest 35260.1 35047.88 +0.61 -23.49 0 % % .WIG20 Warsaw 1764.26 1772.85 -0.48% -17.94 % .BETI Bucharest 9124.80 9064.65 +0.66 -8.54% % .SBITOP Ljubljana <.SBITOP 851.42 851.41 +0.00 -8.04% > % .CRBEX Zagreb 1594.04 1602.28 -0.51% -20.99 % .BELEX1 Belgrade <.BELEX1 691.45 692.04 -0.09% -13.75 5 5> % .SOFIX Sofia 434.06 435.11 -0.24% -23.60 % Yield Yield Spread Daily (bid) change vs change Bund in Czech spread Republic CZ2YT=R 2-year <CZ2YT=R 0.1380 -0.0530 +083b -5bps R R> ps CZ5YT=R 5-year <CZ5YT=R 0.6890 -0.0420 +138b -4bps R R> ps CZ10YT= 10-year <CZ10YT= 1.1070 -0.0260 +158b -2bps RR RR> ps Poland PL2YT=R 2-year <PL2YT=R 0.0860 -0.0450 +077b -4bps R R> ps PL5YT=R 5-year <PL5YT=R 0.7330 -0.0110 +142b -1bps R R> ps PL10YT= 10-year <PL10YT= 1.4030 -0.0010 +187b +1bps RR RR> ps FORWARD 3x6 6x9 9x12 3M interb ank Czech Rep 0.38 0.39 0.44 0.34 <PRIBOR= > Hungary 0.78 0.85 0.90 0.62 Poland 0.22 0.20 0.20 0.23 Note: FRA are for ask quotes prices ********************************************** **************** (Additional reporting by Jason Hovet in Prague, Editing by Sherry Jacob-Phillips)

CEE MARKETS-Currencies firm, forint regains some of its losses as dollar slides

28 Aug 2020

By Anita Komuves BUDAPEST, Aug 28 Most Central European currencies firmed and the forint recouped some of its recent losses on Friday as the dollar slid after U.S. Federal Reserve chairman Jerome Powell announced a policy shift on inflation. The Hungarian forint weakened for two weeks and touched two-month lows in the previous session. On Friday it edged up 0.17% to trade at 355.88 per euro. "Based on the technical picture I expect a correction in the EUR/HUF exchange rate which could firm back as far as 352.5," an FX trader in Budapest said. "Macroeconomic data spoiled investors' mood lately but those numbers will get better in the next quarter. A lot will depend on the September inflation report of the central bank." The currency broke away from its regional peers in mid-August as it came under pressure from dismal Hungarian GDP data, high inflation and loose monetary policy. Inflation came in at a higher-than-expected annual 3.8% in July and GDP dropped by 13.6% year-on-year in Q2. The Romanian leu was little moved and trading at 4.8395 per euro ahead of a vote of no confidence against the government of Ludovic Orban on Monday. The vote adds to years of political instability that have kept the currency under pressure. "If the vote of no confidence was going to be successful this might put pressure on the leu, at least short term," Commerzbank said in a note. "In this case Orban’s government will continue governing until the parliamentary elections in December, and as a result the effects on the leu are likely to be limited." Elsewhere, the Czech crown firmed 0.1% and was trading at 26.260 versus the common currency. The Polish zloty firmed 0.17% to 4.4059 per euro. Stocks in the region were mixed, with Prague's equities up 0.25% and Budapest sliding 0.91%. Warsaw's index was down 0.28% while Bucharest's stock market edged up 0.03%. CEE SNAPSHO AT MARKETS T 1052 CET CURRENC IES Latest Previous Daily Change bid close change in 2020 EURCZK= Czech <EURCZK= 26.2600 26.2850 +0.10 -3.15% crown > % EURHUF= Hungary <EURHUF= 355.880 356.5000 +0.17 -6.95% forint > 0 % EURPLN= Polish <EURPLN= 4.4059 4.4132 +0.17 -3.39% zloty > % EURRON= Romanian <EURRON= 4.8395 4.8385 -0.02% -1.06% leu > EURHRK= Croatian <EURHRK= 7.5250 7.5265 +0.02 -1.06% kuna > % EURRSD= Serbian <EURRSD= 117.500 117.6000 +0.09 +0.06% dinar > 0 % Note: calculated from 1800 daily CET change Latest Previous Daily Change close change in 2020 .PX Prague 906.15 903.8800 +0.25 -18.78% % .BUX Budapest 35148.4 35470.36 -0.91% -23.73% 2 .WIG20 Warsaw 1841.40 1846.50 -0.28% -14.36% .BETI Buchares 8877.30 8874.51 +0.03 -11.03% t % .SBITOP Ljubljan <.SBITOP 852.43 853.53 -0.13% -7.93% a > .CRBEX Zagreb 1614.16 1616.34 -0.13% -19.99% .BELEX1 Belgrade <.BELEX1 692.58 690.44 +0.31 -13.61% 5 5> % .SOFIX Sofia 430.27 430.86 -0.14% -24.27% Yield Yield Spread Daily (bid) change vs change Bund in Czech spread Republic CZ2YT=R 2-year <CZ2YT=R 0.1350 -0.0470 +078b -4bps R R> ps CZ5YT=R 5-year <CZ5YT=R 0.6700 -0.0510 +130b -5bps R R> ps CZ10YT= <CZ10YT= 1.0260 -0.0260 +141b -5bps RR 10-year RR> ps Poland PL2YT=R 2-year <PL2YT=R 0.1430 -0.0010 +079b +0bps R R> ps PL5YT=R 5-year <PL5YT=R 0.7950 0.0190 +143b +2bps R R> ps PL10YT= <PL10YT= 1.4180 0.0430 +180b +2bps RR 10-year RR> ps FORWARD 3x6 6x9 9x12 3M interba nk Czech 0.37 0.39 0.46 0.34 Rep <PRIBOR= > Hungary 0.77 0.86 0.93 0.62 Poland 0.25 0.26 0.27 0.23 Note: are for ask FRA prices quotes ********************************************* ***************** (Additional reporting by Jason Hovet in Prague. Editing by Carmel Crimmins)

CEE MARKETS-Forint weakens, yields drop after Hungary central bank ups bond purchases

26 Aug 2020

By Anita Komuves BUDAPEST, Aug 26 The forint weakened on Wednesday, underperforming regional peers, while Hungarian government bond yields dropped after the central bank said on Tuesday it would increase its government bond purchases. The National Bank of Hungary left its base rate unchanged on Tuesday and announced an increase in its weekly bond buys, which has driven yields lower, traders said. Yields on the 20-year bond dropped 23 basis points since the announcement, from 3.05% before the NBH announcement to 2.82%, according to two fixed income traders in Budapest. They both expect long-term bond yields to drop further in reaction to the expansion of the bank's programme. Yields on the 10-year bond fell 7 basis points to 2.24% while 5-year bond yields dropped 5 basis points to 1.57% and yields on 3-year bonds were at 1.12%, down 2 bps, they said. The forint reached a one-month low around 354 against the euro after the central bank's meeting but rebounded to 352.22 after Deputy Governor Barnabas Virag's comments that the bank has no room to cut short-term rates further. These gains all evaporated on Wednesday. The currency was down 0.51%, trading at 354.300 per euro by 0952 GMT. The central bank, which cut its base rate in June and July, said in a statement that it expected the disinflationary effects of the pandemic to rein in price growth. Inflation came in at a higher-than-expected annual 3.8% in July and GDP dropped by 13.6% year-on-year in Q2. "The FX market correctly suspects that the MPC will probably not re-think its stance over the coming year, no matter what happens to inflation," Commerzbank said in a note. "This is why the forint is likely to keep underperforming: we forecast EUR-HUF to trade at 360.00 levels next year." Elsewhere, the Czech crown eased 0.15% to 26.205 versus the euro while the Polish zloty and the Romanian leu were stable. Hungary plans to finance an increased budget deficit this year by boosting its forint-denominated government bond sales, the debt management agency AKK said on Wednesday. The Polish state investment bank BGK will hold a bond auction on Wednesday to finance the government's anti-crisis shield to protect the economy from the coronavirus. The Czech finance ministry is also holding a government bond auction later today. Stocks in the region were mixed, with Budapest weakening 0.41% and Prague flat. Warsaw's equities were up 0.33% and Bucharest's index firmed 0.37%. CEE SNAPSHO AT MARKETS T 1152 CET CURRENC IES Latest Previous Daily Change bid close change in 2020 EURCZK= Czech <EURCZK= 26.2050 26.1650 -0.15% -2.95% crown > EURHUF= Hungary <EURHUF= 354.300 352.5000 -0.51% -6.54% forint > 0 EURPLN= Polish <EURPLN= 4.4065 4.3990 -0.17% -3.41% zloty > EURRON= Romanian <EURRON= 4.8405 4.8419 +0.03 -1.08% leu > % EURHRK= Croatian <EURHRK= 7.5260 7.5285 +0.03 -1.07% kuna > % EURRSD= Serbian <EURRSD= 117.500 117.6000 +0.09 +0.06% dinar > 0 % Note: calculated from 1800 daily CET change Latest Previous Daily Change close change in 2020 .PX Prague 908.02 909.0500 -0.11% -18.61% .BUX Budapest 35581.4 35593.67 -0.03% -22.79% 7 .WIG20 Warsaw 1828.21 1821.29 +0.38 -14.97% % .BETI Buchares 8815.36 8785.18 +0.34 -11.65% t % .SBITOP Ljubljan <.SBITOP 853.45 851.71 +0.20 -7.82% a > % .CRBEX Zagreb 1620.74 1616.99 +0.23 -19.66% % .BELEX1 Belgrade <.BELEX1 689.45 691.16 -0.25% -14.00% 5 5> .SOFIX Sofia 433.78 433.71 +0.02 -23.65% % Yield Yield Spread Daily (bid) change vs change Bund in Czech spread Republic CZ2YT=R 2-year <CZ2YT=R 0.1300 -0.0420 +077b -5bps R R> ps CZ5YT=R 5-year <CZ5YT=R 0.7030 -0.0030 +133b -2bps R R> ps CZ10YT= <CZ10YT= 1.0350 -0.0090 +144b -3bps RR 10-year RR> ps Poland PL2YT=R 2-year <PL2YT=R 0.1620 0.0130 +081b +0bps R R> ps PL5YT=R 5-year <PL5YT=R 0.7670 -0.0080 +139b -3bps R R> ps PL10YT= <PL10YT= 1.3570 -0.0110 +176b -3bps RR 10-year RR> ps FORWARD 3x6 6x9 9x12 3M interba nk Czech 0.36 0.37 0.44 0.34 Rep <PRIBOR= > Hungary 0.76 0.83 0.89 0.61 Poland 0.24 0.24 0.25 0.23 Note: are for ask FRA prices quotes ********************************************* ***************** (Additional reporting by Jason Hovet in Prague and Alan Charlish in Warsaw; Editing by Alex Richardson)

UPDATE 2-CEE MARKETS-Forint rebounds as central banker sees no room to cut rates further

25 Aug 2020

(Updates with Hungary central banker on rates) By Anita Komuves BUDAPEST, Aug 25 The Hungarian forint rebounded against the euro in late Tuesday trade after a top Hungarian central banker reiterated that there was no room to cut short-term rates any further. At its meeting earlier on Tuesday, Hungary's central bank left its base rate unchanged at 0.6%, as expected, and announced that it would increase the amount of its weekly government bond purchases. Bond yields were unchanged immediately after the announcement, a fixed income trader said in Budapest. The forint reached a one-month low, trading 0.6% lower against the euro at around 354 after the meeting. However, it rebounded to 352.22 by 1433 GMT, after deputy Governor Barnabas Virag told an online briefing the bank has no room to cut short-term rates further. nS8N2DB0AA The central bank, which cut its base rate in June and July, said in a statement after the rate decision that it expects the disinflationary effects of the coronavirus pandemic to rein in price growth over its monetary policy horizon. Markets were closely watching the bank's comments on higher-than-expected inflation and economic recovery as inflation came in at an annual 3.8% in July and GDP dropped by 13.6% year-on-year in the second-quarter. "If the central bank were to sound more dovish, the downward trend in HUF might continue in the near future," Commerzbank wrote before the decision. Elsewhere, the zloty and the Czech crown were stable. "The Czech koruna is currently trading close to our target of EUR/CZK 26.0 for the end of the year," Raiffeisen said. However, it is "not going to appreciate to the levels we (saw) before the pandemic shock ... The interest rate differential with the euro area declined significantly." CEE SNAPSHOT AT MARKETS 1633 CET CURRENCIE S Latest Previou Daily Change s bid close change in 2020 Czech 26.1720 26.1000 -0.28% -2.83% crown Hungary 352.2200 351.900 -0.09% -5.98% forint 0 Polish 4.3955 4.3945 -0.02% -3.16% zloty Romanian 4.8419 4.8395 -0.05% -1.11% leu Croatian 7.5280 7.5325 +0.06 -1.10% kuna % Serbian 117.5000 117.600 +0.09 +0.06% dinar 0 % Note: calculated from 1800 daily CET change Latest Previou Daily Change s close change in 2020 Prague 909.05 899.940 +1.01 -18.52% 0 % Budapest 35740.01 35994.8 -0.71% -22.44% 3 Warsaw 1820.47 1841.46 -1.14% -15.33% Bucharest 8804.64 8737.14 +0.77 -11.75% % Ljubljana 851.71 854.80 -0.36% -8.01% Zagreb 1616.99 1609.00 +0.50 -19.85% % Belgrade <.BELEX15 691.16 692.10 -0.14% -13.79% > Sofia 433.71 435.17 -0.34% -23.66% Yield Yield Spread Daily (bid) change vs change in Bund Czech spread Republic 2-year <CZ2YT=RR 0.1260 0.0080 +077b -2bps > ps 5-year <CZ5YT=RR 0.6840 -0.0100 +133b -6bps > ps 10-year <CZ10YT=R 1.0410 0.0300 +147b -3bps R> ps Poland 2-year <PL2YT=RR 0.1490 0.0000 +080b -3bps > ps 5-year <PL5YT=RR 0.7700 0.0050 +141b -4bps > ps 10-year <PL10YT=R 1.3600 0.0120 +179b -5bps R> ps FORWARD 3x6 6x9 9x12 3M interbank Czech Rep < 0.36 0.36 0.43 0.34 PRIBOR=> Hungary < 0.76 0.84 0.90 0.61 BUBOR=> Poland < 0.23 0.24 0.25 0.23 WIBOR=> Note: FRA are for ask prices quotes ************************************************ ************** (Additional reporting by Jason Hovet in Prague Editing by Susan Fenton)

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