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Gergely Szakacs

Hungary to keep rates steady as inflation shifts higher - Reuters poll

13 Nov 2019

BUDAPEST The National Bank of Hungary (NBH) is expected to keep interest rates unchanged at its monthly policy meeting on Tuesday based on the unanimous forecast of 16 economists in a Reuters poll, which projects no change in official rates before 2021.

CEE MARKETS-Zloty falls as Polish central bank forecasts growth slowdown

12 Nov 2019

By Gergely Szakacs BUDAPEST, Nov 12 The Polish zloty fell versus the euro in early trade on Tuesday after the National Bank of Poland published its latest economic forecasts, confirming an expected slowdown in the eastern European region next year. By 0931 GMT, the zloty had regained some ground to trade 0.1% lower at 4.2750 per euro. The Hungarian forint, the region's laggard in 2019, which has drifted to weaker levels over the past days, shed 0.1% to 334.23. The Polish central bank, which left interest rates unchanged last week, sees inflation remaining within its target range in the coming years. However, it said growth would slow to 3.6% next year from 4.3% expected in 2019. "On Tuesday morning, EURPLN opens around 4.273 after some depreciation of the zloty on low liquidity during the Monday national holiday," economists at Santander Bank Polska said. "We think that given the rapid rise of bond yields on core markets, EURPLN may be going up towards 4.30 in the short run." The National Bank of Hungary, the region's most dovish central bank, meets next Tuesday to discuss interest rates. Data published last week showed an increase in inflation to 2.9% in October. Core inflation rose to 4%. The central bank is unlikely to change interest rates as it usually delivers any changes to its monetary policy framework after updating its quarterly inflation report. The next such meeting is due in December. The bank also expects growth to slow next year, to 3.3% from 4.5% seen in 2019. "There is no stopping the weakening trend in the forint. Yesterday the Hungarian currency fell for the sixth consecutive day versus the euro," economists at Erste Investment said. The analysts said that weakening opened the door to further losses, towards record lows at 336 per euro. The Romanian leu was steady after October inflation data met market expectations, slowing to 3.4% from 3.5% in September. "We think that the deceleration in the y/y consumer prices is only temporary," analysts at Erste Group Research said in a note. "We maintain our 2019 and 2020 headline inflation forecasts at 4% and 3.4%, respectively, but see some upside risks for 2020, mainly due to the likely adoption of a new calendar for the liberalisation of natural gas and electricity prices." CEE SNAPSHO AT MARKETS T 1031 CET CURRENC IES Latest Previou Daily Change s bid close change in 2019 EURCZK Czech <EURCZK 25.5100 25.5100 +0.00% +0.77% = crown => EURHUF Hungary <EURHUF 334.230 333.950 -0.08% -3.93% = forint => 0 0 EURPLN Polish <EURPLN 4.2750 4.2706 -0.10% +0.34% = zloty => EURRON Romanian <EURRON 4.7635 4.7630 -0.01% -2.30% = leu => EURHRK Croatian <EURHRK 7.4450 7.4383 -0.09% -0.47% = kuna => EURRSD Serbian <EURRSD 117.350 117.455 +0.09% +0.81% = dinar => 0 0 Note: calculated from 1800 daily CET change Latest Previou Daily Change s close change in 2019 .PX Prague 1083.99 1085.25 -0.12% +9.88% 00 .BUX Budapest 43238.7 43038.6 +0.46% +10.48 8 7 % .WIG20 Warsaw <.WIG20 2249.70 2255.46 -0.26% -1.18% > .BETI Buchares 9711.46 9720.79 -0.10% +31.53 t % .SBITO Ljubljan <.SBITO 871.67 871.10 +0.07% +8.38% P a P> .CRBEX Zagreb <.CRBEX 1972.02 1972.14 -0.01% +12.76 > % .BELEX Belgrade <.BELEX 756.68 751.93 +0.63% -0.66% 15 15> .SOFIX Sofia <.SOFIX 556.94 557.77 -0.15% -6.31% > BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic CZ2YT= 2-year <CZ2YT= 1.3530 0.0120 +198bp +2bps RR RR> s CZ5YT= 5-year <CZ5YT= 1.2120 0.0080 +175bp +0bps RR RR> s CZ10YT <CZ10YT 1.5820 -0.0030 +181bp -2bps =RR 10-year =RR> s Poland PL2YT= 2-year <PL2YT= 1.4270 -0.0070 +205bp +0bps RR RR> s PL5YT= 5-year <PL5YT= 1.8720 0.0170 +241bp +1bps RR RR> s PL10YT <PL10YT 2.2000 0.0080 +243bp -1bps =RR 10-year =RR> s FORWARD RATE AGREEME NT 3x6 6x9 9x12 3M interba nk Czech <CZKFRA 2.25 2.24 2.20 2.19 Rep ><PRIBO R=> Hungary <HUFFRA 0.27 0.31 0.36 0.19 ><BUBOR => Poland <PLNFRA 1.72 1.70 1.70 1.71 ><WIBOR => Note: are for ask FRA prices quotes (Reporting by Gergely Szakacs, additional reporting by Alan Charlish in Warsaw and Luiza Ilie in Bucharest; editing by Larry King)

UPDATE 2-Hungary cenbank affirms loose policy stance, sees downside price risks

22 Oct 2019

BUDAPEST, Oct 22 The National Bank of Hungary (NBH) left interest rates unchanged and affirmed its accommodative policy stance at its monthly meeting on Tuesday, reiterating its view that downside inflation risks have strengthened due to weakening European activity.

Hungary central bank to keep rates steady at least until end-2020: Reuters poll

17 Oct 2019

BUDAPEST The National Bank of Hungary (NBH) is expected to keep interest rates unchanged at least until the end of next year as inflation stays near its 3% target and economic growth looks set to slow from this year's highs, a Reuters poll of analysts showed.

Hungary's opposition wins Budapest election, makes gains in other cities

13 Oct 2019

BUDAPEST Hungary's opposition scored its biggest election victory in a decade on Sunday when liberal challenger Gergely Karacsony ousted ruling-party incumbent Istvan Tarlos as mayor of Budapest and opposition parties made gains in other major cities as well.

Hungary opposition seeks new lease of life in Budapest mayoral contest

10 Oct 2019

BUDAPEST Hungary's opposition could score its biggest political win in a decade if liberal hopeful Gergely Karacsony manages to unseat ruling party incumbent Istvan Tarlos in the Budapest mayoral election on Sunday - and the race appears to be tightening.

Investments, household consumption to drive Hungarian economy: minister

01 Oct 2019

BUDAPEST Investments and robust household consumption are expected to drive Hungary's economy next year, Finance Minister Mihaly Varga said on Tuesday.

Interview: Hungary sees no solitary veto of new Brexit delay -PM aide

16 Sep 2019

BUDAPEST Hungary on its own will not veto a new delay to Britain's departure from the European Union, a top minister said on Monday, adding that a disorderly Brexit would dent Hungary's strong economic growth.

Hungary sees no solitary veto of new Brexit delay: PM aide

16 Sep 2019

BUDAPEST Hungary on its own will not veto a new delay to Britain's departure from the European Union, a top minister said on Monday, adding that a disorderly Brexit would dent Hungary's strong economic growth.

CEE MARKETS-Hungarian forint sinks to record low, underperforming region

11 Sep 2019

By Gergely Szakacs BUDAPEST, Sept 11 The Hungarian forint fell 0.2% on Wednesday morning to a record low of 332 to the euro, underperforming other central European currencies. At 0834 GMT, the forint traded at 332.1 versus the euro, extending its losses for the year to more than 3%, the worst in the region. Traders said the forint had decoupled from other central European currencies in recent days. Economists at Erste Investment said foreign players unwinding stock market positions were probably one reason for the forint's weakness. Another was the central bank's maintaining high interbank liquidity at a Monday tender. Although inflation rose to the central bank's 2% to 4% target range in the first half, the bank has maintained its accommodative stance after a moderate tightening move in March. Inflation has slowed down since then, in line with the expectations of the central bank. In August, headline inflation was 3.1%, below forecasts. The next rate meeting is due on Sept. 24. The Erste economists said a back-and-forth between Central Bank Governor Gyorgy Matolcsy and Finance Minister Mihaly Varga early this week also contributed to a weakening forint. "On the whole, we do not consider any of these reasons strong enough or a major departure from previous economic policy that would justify this spectacular weakening of the forint," the analysts said. "Therefore, we think that this extent of the forint's weakness should be temporary." The European Central Bank is widely expected to introduce monetary easing and stimulus measures on Thursday, to offset the effects of an ongoing U.S.-Sino trade war and a global economic slowdown. One currency trader in Budapest said ECB easing may provide temporary respite to the forint, but was probably not enough in itself to reverse an easing bias in the currency. The zloty was steady ahead of a Polish Monetary Policy council meeting on Wednesday, where the central bank is expected to keep its benchmark rate at a record low 1.5%. "The global growth uncertainty and monetary easing abroad give the MPC good reasons to stick to wait-and-see approach and keep rates stable for longer," economists at Santander said in a note. "We continue to expect unchanged rates this year and next." The leu was steady after Romania's consumer price inflation slowed to 3.9% on the year in August from July's 4.1%, above market expectations of 3.8% and the central bank's target range. "While inflation is still above the NBR’s target and will remain so in next months, calling for tight monetary policy, the external environment works in the opposite direction, preventing a potential hike in the policy rate due to market expectations about a loosening of the ECB’s monetary policy," analysts at BCR said in a note. CEE SNAPSHO AT MARKETS T 1034 CET CURRENC IES Latest Previou Daily Change s bid close change in 2019 EURCZK Czech <EURCZK 25.8750 25.8520 -0.09% -0.65% = crown => EURHUF Hungary <EURHUF 332.100 331.350 -0.23% -3.32% = forint => 0 0 EURPLN Polish <EURPLN 4.3329 4.3335 +0.01% -1.00% = zloty => EURRON Romanian <EURRON 4.7335 4.7315 -0.04% -1.68% = leu => EURHRK Croatian <EURHRK 7.3945 7.3925 -0.03% +0.21% = kuna => EURRSD Serbian <EURRSD 117.610 117.510 -0.09% +0.59% = dinar => 0 0 Note: calculated from 1800 daily CET change Latest Previou Daily Change s close change in 2019 .PX Prague 1039.91 1035.04 +0.47% +5.41% 00 .BUX Budapest 40060.7 39956.9 +0.26% +2.36% 9 6 .WIG20 Warsaw <.WIG20 2198.77 2187.80 +0.50% -3.42% > .BETI Buchares 9226.61 9229.37 -0.03% +24.96 t % .SBITO Ljubljan <.SBITO 848.38 850.55 -0.26% +5.49% P a P> .CRBEX Zagreb <.CRBEX 1878.24 1881.28 -0.16% +7.40% > .BELEX Belgrade <.BELEX 753.99 751.84 +0.29% -1.01% 15 15> .SOFIX Sofia <.SOFIX 574.29 576.29 -0.35% -3.39% > BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic CZ2YT= 2-year <CZ2YT= 1.2100 -0.0030 +202bp -1bps RR RR> s CZ5YT= 5-year <CZ5YT= 1.0120 -0.0660 +186bp -7bps RR RR> s CZ10YT <CZ10YT 1.3100 0.0030 +185bp -1bps =RR 10-year =RR> s Poland PL2YT= 2-year <PL2YT= 1.5820 0.0190 +239bp +1bps RR RR> s PL5YT= 5-year <PL5YT= 1.9220 -0.0180 +277bp -3bps RR RR> s PL10YT <PL10YT 2.1550 -0.0130 +269bp -3bps =RR 10-year =RR> s FORWARD RATE AGREEME NT 3x6 6x9 9x12 3M interba nk Czech <CZKFRA 2.12 2.03 1.89 2.14 Rep ><PRIBO R=> Hungary <HUFFRA 0.30 0.36 0.42 0.23 ><BUBOR => Poland <PLNFRA 1.74 1.72 1.71 1.72 ><WIBOR => Note: are for ask FRA prices quotes (Reporting by Gergely Szakacs in Budapest and Luiza Ilie in Bucharest; editing by Larry King)

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