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Jason Hovet

CEE MARKETS-Forint hits 6-week high as FX gain after British vote

13 Dec 2019

By Jason Hovet and Gergely Szakacs PRAGUE/BUDAPEST, Dec 13 Hungary's forint rose to a six-week high on Friday as Central European currencies firmed after British Prime Minister Boris Johnson's resounding election victory and progress in U.S.-China trade talks lifted sentiment. A win for the Conservative Party was expected to clear political gridlock over Britain's exit from the European Union, which would clear up uncertainty hanging over Europe's economies. "This has more of a positive message. It cuts uncertainty, regardless of whether you like the outcome or not," a Budapest-based trader said. The forint firmed past the resistance level of 330 to the euro, bidding at 328.80, up 0.15%, at 0915 GMT. Poland's zloty gained 0.3% and the Romanian leu was a touch up. The Czech crown also edged past the psychological level of 25.50 to the euro, which has cut short gains this quarter, and bid at 25.497 per euro, up 0.1%. Sentiment was helped also by steps forward in talks between the United States and China to end trade disputes, dealers said. A Prague dealer said it was not certain how big of a break the crown could see, if any. "We have (the central bank) next week, as well, so once there are some hawkish comments, and the external factors now look rather good, we might get below (25.40) but I don't believe in a big real break before the end of next week or so," the trader said. On stock markets, Prague's index gained a third of a percent while Budapest rose 0.8% and Warsaw half a percent. Shares in Czech lender Moneta Money Bank rose 1.2% to hit their highest level since April 2018 as the bank completed a deal to buy the Czech building savings and mortgage business of Germany's Wuestenrot & Wuerttembergische late on Thursday. CEE MARKETS SNAPSHOT AT 1015 CET CURRENCIES Latest Previous Daily Change bid close change in 2019 EURCZK= Czech crown 25.4970 25.5230 +0.10% +0.82% EURHUF= Hungary forint 328.8000 329.3000 +0.15% -2.35% EURPLN= Polish zloty 4.2750 4.2871 +0.28% +0.34% EURRON= Romanian leu 4.7799 4.7816 +0.04% -2.63% EURHRK= Croatian kuna 7.4380 7.4375 -0.01% -0.38% EURRSD= Serbian dinar 117.3700 117.4900 +0.10% +0.79% Note: daily change calculated from 1800 CET Latest Previous Daily Change close change in 2019 .PX Prague 1095.55 1091.7800 +0.35% +11.05% .BUX Budapest 45752.10 45382.68 +0.81% +16.90% .WIG20 Warsaw 2112.26 2102.19 +0.48% -7.22% .BETI Bucharest 9845.36 9779.39 +0.67% +33.34% .SBITOP Ljubljana 921.40 916.05 +0.58% +14.56% .CRBEX Zagreb 1979.25 1977.70 +0.08% +13.18% .BELEX15 Belgrade 771.83 775.63 -0.49% +1.33% .SOFIX Sofia 543.12 543.50 -0.07% -8.64% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech Republic spread CZ2YT=RR 2-year 1.5500 -0.0030 +217bps -1bps CZ5YT=RR 5-year 1.3730 0.1110 +189bps +10bps CZ10YT=RR 10-year 1.5310 0.0490 +177bps +3bps Poland PL2YT=RR 2-year 1.4260 0.0200 +205bps +2bps PL5YT=RR 5-year 1.7950 0.0180 +231bps +0bps PL10YT=RR 10-year 2.0350 0.0320 +228bps +1bps FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M interbank Czech Rep 2.25 2.26 2.20 2.18 Hungary 0.26 0.31 0.34 0.16 Poland 1.74 1.73 1.71 1.70 Note: FRA quotes are for ask prices ************************************************************** (Reporting by Jason Hovet in Prague and Gergely Szakacs in Budapest, additional reporting by Alan Charlish in Warsaw; Editing by Angus MacSwan)

Few gains for central Europe's currencies in the coming year - Reuters poll

05 Dec 2019

PRAGUE Central Europe's main currencies will struggle to appreciate in the next year, with the Hungarian forint seen sticking near record lows and only the Czech crown expected to eke out small gains, a Reuters poll showed on Thursday.

CEE MARKETS-Forint slips to record low, leu holds on to gains

26 Nov 2019

By Jason Hovet and Krisztina Than PRAGUE/BUDAPEST, Nov 26 The Hungarian forint slipped to a record low against the euro on Tuesday as the central bank's easy monetary policy stance, the loosest in central Europe, kept the currency under pressure. Most other central European currencies and stock markets dipped in early trade as investors shifted from optimism in U.S.-China trade talks to waiting for more concrete progress. The Romanian leu, though, stayed elevated after a post-election bounce that followed incumbent President Klaus Iohannis winning a run-off vote on Sunday. The forint remained hardest hit by investors, dropping past an all-time low hit in September to trade as weak as 336.95 to the euro. By 0928 GMT, the forint was down 0.2% at 336.50. It has lost 4.6% so far this year. "The underlying basic reason is monetary policy in Hungary," one dealer said. The National Bank of Hungary maintained its ultra-loose policy last week, keeping the base rate at 0.9% and the overnight deposit rate at minus 0.05%. It is sticking to its accommodative stance, especially as economic growth is expected to slow in Hungary next year from close to 5% this year. The central bank declined to comment on the forint in an emailed reply to Reuters questions on Tuesday. It has repeatedly said it has no exchange rate target. "Why would the forint have strengthened? Nothing has changed, apart from the fact that sentiment in emerging markets has soured a little," another local dealer said. "So far this is a one way street for the forint (towards weakening)," the dealer added. Other central banks have also held interest rates steady even as major monetary institutions like the European Central Bank and U.S. Federal Reserve loosen policy. In the Czech case, rate setters are still debating a possible hike, although analysts widely expect rate stability ahead. The Czech crown and the Polish zloty dipped less than 0.1%, both sitting off multi-month highs hit this month. The leu was also relatively flat at 4.775 to the euro after touching its weakest since January last week. Markets expect the leu to stay on a weaker footing as a new minority government deals with plugging budget gaps. A draft bill on Tuesday showed the consolidated budget target for 2019 will be raised to 4.3% of gross domestic product from an initial estimate of 2.8%. The budget plan for 2020 will take the consolidated deficit as close to 3% of GDP as possible, Finance Minister Florin Citu said on Monday. CEE SNAPSHO AT MARKETS T 1028 CET CURRENC IES Latest Previou Daily Change s bid close change in 2019 EURCZK Czech <EURCZK 25.5120 25.5065 -0.02% +0.76% = crown => EURHUF Hungary <EURHUF 336.500 335.800 -0.21% -4.58% = forint => 0 0 EURPLN Polish <EURPLN 4.3000 4.2984 -0.04% -0.24% = zloty => EURRON Romanian <EURRON 4.7755 4.7750 -0.01% -2.54% = leu => EURHRK Croatian <EURHRK 7.4330 7.4353 +0.03% -0.31% = kuna => EURRSD Serbian <EURRSD 117.600 117.620 +0.02% +0.60% = dinar => 0 0 Note: calculated from 1800 daily CET change Latest Previou Daily Change s close change in 2019 .PX Prague 1083.40 1084.56 -0.11% +9.82% 00 .BUX Budapest 43968.5 44314.4 -0.78% +12.34 9 5 % .WIG20 Warsaw <.WIG20 2189.71 2197.54 -0.36% -3.82% > .BETI Buchares 9747.73 9772.01 -0.25% +32.02 t % .SBITO Ljubljan <.SBITO 897.17 898.76 -0.18% +11.55 P a P> % .CRBEX Zagreb <.CRBEX 2003.64 1993.75 +0.50% +14.57 > % .BELEX Belgrade <.BELEX 764.77 764.77 +0.00% +0.40% 15 15> .SOFIX Sofia <.SOFIX 548.25 548.62 -0.07% -7.77% > BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic CZ2YT= 2-year <CZ2YT= 1.4250 -0.0200 +206bp -2bps RR RR> s CZ5YT= 5-year <CZ5YT= 1.2980 0.0920 +190bp +10bps RR RR> s CZ10YT <CZ10YT 1.4920 0.0100 +185bp +2bps =RR 10-year =RR> s Poland PL2YT= 2-year <PL2YT= 1.3900 -0.0140 +202bp -1bps RR RR> s PL5YT= 5-year <PL5YT= 1.7680 -0.0210 +237bp -1bps RR RR> s PL10YT <PL10YT 2.0390 -0.0130 +240bp +0bps =RR 10-year =RR> s FORWARD RATE AGREEME NT 3x6 6x9 9x12 3M interba nk Czech <CZKFRA 2.24 2.24 2.15 2.18 Rep ><PRIBO R=> Hungary <HUFFRA 0.23 0.25 0.29 0.18 ><BUBOR => Poland <PLNFRA 1.73 1.71 1.66 1.71 ><WIBOR => Note: are for ask FRA prices quotes ******************************************** ****************** (Reporting by Jason Hovet in Prague, Krisztina Than in Budapest and Luiza Ilie in Bucharest; Editing by Jan Harvey)

CEE MARKETS-Forint, crown on weaker footing over dovish central banks

15 Nov 2019

By Krisztina Than and Jason Hovet BUDAPEST/PRAGUE, Nov 15 The forint underperformed its Central European peers on Friday ahead of next week's Hungarian central bank meeting where the bank is seen sticking to its loose stance, and the Czech crown also eased despite positive sentiment on stock markets. The crown weakened to a three-week low on Friday after minutes from the central bank's Nov. 7 policy meeting sounded less hawkish than many investors expected, a Prague dealer said. The bank had voted 5-2 to leave rates on hold, with the minutes showing board members Tomas Holub and Vojtech Benda backing a 25 basis point increase to the main rate, which now sits at 2.0%. The Czech central bank is still debating tightening policy even as most of the rest of Europe maintains loose monetary stances, with the region's robustly growing economies seen slowing as the impact of a slowdown in the euro zone makes itself felt. Domestic demand in Central Europe remains very strong due to massive wage hikes, which could to some extent offset the impact if exports suffer. GDP data on Thursday from most countries in the region showed that signs of a slowdown were already visible in the third quarter of 2018. Hungary stood out as economic growth accelerated more than expected, rising to an annual 5.0% in the third quarter. * For an interactive version: https://tmsnrt.rs/2KgEAwH While the vote at the Czech rate meeting last week was the same as at a previous meeting, Holub this time joined Benda in backing a hike, meaning three central bankers have supported higher rates at the last two sittings. "A hawkish sign was Holub was voting for a hike. (But) the minutes seem dovish in some way," ING economist Jakub Seidler said. The minutes showed board members saw signs of deterioration in the domestic economy since the last meeting and that most would tolerate a "short-term" breaching of the bank's 3% upper limit on inflation. The forint fell 0.2% against the euro to 334.75 by 0935 GMT, edging towards a record low of 336.28 hit in September. Analysts at brokerage Equilor said the forint could soon test this level based on the technical picture, after the level of 333 stopped and reversed the currency's earlier gains. The National Bank of Hungary (NBH) is expected to keep interest rates unchanged at its 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. The NBH has maintained its accommodative stance, warning of downside price risks due to weakening European activity. Stock markets across the region firmed on Friday, as international sentiment improved on hopes that the United States and China were close to signing a long-awaited trade deal that could end the trade war that has rattled investors' nerves this year. CEE SNAPSHOT AT MARK 1035 ETS CET CURRENCIE S Latest Previo Daily Change us bid close change in 2019 EURCZK= Czech <EUR 25.5850 25.593 +0.03 +0.48% crown CZK= 0 % > EURHUF= Hungary <EUR 334.7500 334.13 -0.18% -4.08% forint HUF= 50 > EURPLN= Polish <EUR 4.2788 4.2859 +0.17 +0.25% zloty PLN= % > EURRON= Romanian <EUR 4.7675 4.7673 -0.01% -2.38% leu RON= > EURHRK= Croatian <EUR 7.4400 7.4385 -0.02% -0.40% kuna HRK= > EURRSD= Serbian <EUR 117.2700 117.47 +0.17 +0.88% dinar RSD= 50 % > Note: calculated from 1800 daily CET change Latest Previo Daily Change us close change in 2019 .PX Prague <.PX 1085.84 1079.3 +0.60 +10.06% > 900 % .BUX Budapest <.BU 43330.21 43218. +0.26 +10.71% X> 28 % .WIG20 Warsaw <.WI 2234.79 2226.1 +0.39 -1.84% G20> 5 % .BETI Bucharest <.BE 9698.70 9692.1 +0.07 +31.35% TI> 7 % .SBITOP Ljubljana <.SB 875.60 877.08 -0.17% +8.87% ITOP > .CRBEX Zagreb <.CR 1974.23 1974.3 -0.01% +12.89% BEX> 4 .BELEX15 Belgrade <.BE 769.64 769.15 +0.06 +1.04% LEX1 % 5> .SOFIX Sofia <.SO 557.17 558.80 -0.29% -6.27% FIX> BONDS Yield Yield Spread Daily (bid) change vs change in Bund Czech spread Republic CZ2YT=RR 2-year <CZ2 1.4410 0.0810 +208b +8bps YT=R ps R> CZ5YT=RR 5-year <CZ5 1.1740 -0.043 +178b -5bps YT=R 0 ps R> CZ10YT=RR 10-year <CZ1 1.4680 0.0140 +181b +1bps 0YT= ps RR> Poland PL2YT=RR 2-year <PL2 1.3850 -0.014 +202b -2bps YT=R 0 ps R> PL5YT=RR 5-year <PL5 1.8000 0.0060 +241b +0bps YT=R ps R> PL10YT=RR 10-year <PL1 2.0790 -0.003 +242b -1bps 0YT= 0 ps RR> FORW RATE AGREEM ARD ENT 3x6 6x9 9x12 3M interbank Czech Rep <CZK 2.23 2.21 2.12 2.18 FRA> <PRI BOR= > Hungary <HUF 0.27 0.33 0.35 0.19 FRA> <BUB OR=> Poland <PLN 1.73 1.70 1.67 1.71 FRA> <WIB OR=> Note: FRA are for ask quotes prices ****************************************** ******************** (Reporting by Krisztina Than in Budapest and Jason Hovet in Prague; Editing by Hugh Lawson)

CEE MARKETS-Currencies steady after Fed, region's central banks keep stable rates outlook

31 Oct 2019

By Krisztina Than and Jason Hovet BUDAPEST/PRAGUE, Oct 31 Central European currencies were broadly steady versus the euro on Thursday after the U.S. Federal Reserve rate cut and comments which dented the dollar and boosted risk sentiment globally. Against the backdrop of monetary policy loosening by the world's largest central banks, central European rate-setters have generally adopted a wait-and-see mode, keeping rates on hold as the region has produced strong economic growth despite a slowdown in the eurozone, its main trading partner. They look likely to maintain this stance even though some Czech policy makers have spoken in favour of rate hikes. A blast of Czech central banker comments came on Wednesday ahead of the central bank's policy meeting next week, with most backing a view that rate stability will be maintained even as debate continues on a possible increase. Governor Jiri Rusnok said the domestic economy was far from recession and balancing contradictory foreign and domestic factors implied rate stability. Ceska Sporitelna economist Jiri Polansky said: "We expect next year inflation will stay above 2% and the bank will discuss the possibility of a hike even in 2020. But given the situation in the world economy and weak German data, they will wait and see how the situation evolves." The state of Brexit and U.S.-China trade talks will be key, Polansky added. Vice-Governor Marek Mora, one of two voting in the minority in September for a hike, was quoted by Lidove Noviny as saying he would probably vote for stability this time. STABLE RATES Central banker Oldrich Dedek told Reuters in an interview this week nothing had changed for him since the last meeting when he backed stable rates, adding debate on a cut was still far away. In Hungary, the central bank has maintained its accommodative stance and has repeatedly said downward inflation risks have increased. Poland's flash CPI stood at 2.5% in October, the statistics office said earlier on Thursday, in line with expectations. "The data will not have an impact on the Monetary Policy Council (MCP) decision on interest rates next week. MPC has consequently announced a long-term stabilization in the cost of money," said Monika Kurtek, chief economist at Bank Pocztowy, said in a note. At 0847 GMT, the crown was flat versus the euro, while the Hungarian forint was 0.1% weaker, along with the Polish zloty. "The Fed rate cut is good for emerging market currencies but for the time being we do not expect a significant forint strengthening," brokerage Equilor said. Stock markets fell across the region, in a correction after significant gains in recent days. CEE SNAPSH AT MARKETS OT 1047 CET CURREN CIES Latest Previo Daily Change us bid close change in 2019 EURCZK= Czech <EURCZK 25.498 25.505 +0.03% +0.82% crown => 0 5 EURHUF= Hungar <EURHUF 329.90 329.55 -0.11% -2.67% y => 00 00 forint EURPLN= Polish <EURPLN 4.2620 4.2597 -0.06% +0.65% zloty => EURRON= Romani <EURRON 4.7570 4.7585 +0.03% -2.17% an leu => EURHRK= Croati <EURHRK 7.4550 7.4622 +0.10% -0.60% an => kuna EURRSD= Serbia <EURRSD 117.37 117.49 +0.10% +0.79% n => 00 00 dinar Note: calculated from 1800 daily CET change Latest Previo Daily Change us close change in 2019 .PX Prague 1056.4 1061.8 -0.51% +7.08% 3 800 .BUX Budape 42231. 42796. -1.32% +7.90% st 83 70 .WIG20 Warsaw <.WIG20 2204.5 2227.3 -1.03% -3.17% > 0 8 .BETI Buchar 9630.7 9646.8 -0.17% +30.43% est 7 7 .SBITOP Ljublj <.SBITO 853.56 853.56 +0.00% +6.13% ana P> .CRBEX Zagreb <.CRBEX 1997.2 2002.2 -0.25% +14.21% > 3 6 .BELEX1 Belgra <.BELEX 748.68 749.79 -0.15% -1.71% 5 de 15> .SOFIX Sofia <.SOFIX 556.04 555.86 +0.03% -6.46% > BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republ ic CZ2YT=R <CZ2YT= 1.2850 0.0460 +194bp +7bps R 2-year RR> s CZ5YT=R <CZ5YT= 1.0750 -0.060 +172bp -2bps R 5-year RR> 0 s CZ10YT= <CZ10YT 1.4080 -0.003 +182bp +5bps RR 10-yea =RR> 0 s r Poland PL2YT=R <PL2YT= 1.4400 -0.025 +210bp +0bps R 2-year RR> 0 s PL5YT=R <PL5YT= 1.7160 -0.047 +236bp -1bps R 5-year RR> 0 s PL10YT= <PL10YT 1.9890 -0.029 +240bp +2bps RR 10-yea =RR> 0 s r FORWARD RATE AGREEM ENT 3x6 6x9 9x12 3M interbank Czech <CZKFRA 2.25 2.24 2.12 2.18 Rep ><PRIBO R=> Hungar <HUFFRA 0.27 0.31 0.34 0.20 y ><BUBOR => Poland <PLNFRA 1.73 1.71 1.68 1.71 ><WIBOR => Note: are for ask FRA prices quotes (Reporting by Krisztina Than Additional reporting by Agnieszka Barteczko in Warsaw and Jason Hovet in Prague Editing by David Holmes)

Broadcaster CME agrees to be acquired by Czech firm PPF in $2.1 bln deal

28 Oct 2019

PRAGUE Investment group PPF, owned by the Czech Republic's wealthiest businessman, Petr Kellner, has agreed to buy broadcaster Central European Media Enterprises Ltd (CME) in a cash deal valued at about $2.1 billion, the companies said on Sunday.

CEE MARKETS-Politics dominate news, markets mildly positive

11 Oct 2019

By Marton Dunai and Jason Hovet BUDAPEST/PRAGUE, Oct 11 Emerging European assets opened on a mildly positive note on Friday as politics dominated the news in most markets, with elections due in Poland and Hungary, and the Romanian government falling after losing a confidence vote. Poland, by far the region's largest economy, holds general elections on Sunday in which the ruling Law and Justice (PiS) party is expected to hold on to power, paving the way for spending increases and likely continued friction with the European Union . The fiscal impact of those measures has mostly been priced in, so an albeit unlikely opposition victory would trigger a sharp rally in Polish assets, Commerzbank said in a note to clients. "Going with the major polls, our base-case is that PiS will win handily and set up a majority government," it said. "Sharp minimum wage hikes and spending increases will follow, driving the fiscal deficit wider next year. Conflict with the EU will continue in the background." Opinion polls show that conservative leader Jaroslaw Kaczynski's PiS, a eurosceptic grouping with a nationalist tilt, is likely to win a second term but may have to seek allies among the opposition. Romanian Prime Minister Viorica Dancila's centre-left government collapsed on Thursday after losing a no-confidence vote in parliament, raising the prospect of prolonged political uncertainty due to a fragmented opposition. A new cabinet will be elected in a Parliamentary procedure but a new election is unlikely before next year. The leu has been stable, and Commerzbank said it was unlikely to take a big hit as "changes in government really are nothing new in Romania." "Further depreciation potential is likely to be limited... there is now hope of a new direction being taken in politics, in particular as regards fiscal policy, which would reduce the potential for conflict with the EU." Hungary holds municipal elections on Sunday that may have little impact on local assets - the ruling right-wing Fidesz party is expected to maintain its dominance of municipalities nationwide and of politics overall. Prime Minister Viktor Orban has had a two-thirds majority in parliament - enough to push through constitutional changes - for most of his decade in power, and even the strongest showing for a broad opposition alliance would only dent that dominance slightly. No general election is due until 2022. CEE SNAPSHOT AT MARKETS 0946 CET CURRENCI ES Latest Previous Daily Change bid close change in 2019 Czech 25.8300 25.8210 -0.03% -0.48% crown Hungary 331.5500 332.3200 +0.23% -3.16% forint Polish 4.3048 4.3143 +0.22% -0.35% zloty Romanian 4.7595 4.7553 -0.09% -2.22% leu Croatian 7.4275 7.4255 -0.03% -0.24% kuna Serbian 117.4000 117.5000 +0.09% +0.77% dinar Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2019 Prague 1005.46 997.2800 +0.82% +1.92% Budapest 39695.92 39466.35 +0.58% +1.42% Warsaw 2130.28 2122.99 +0.34% -6.43% Bucharest 9513.18 9479.50 +0.36% +28.84% Ljubljana 866.12 870.11 -0.46% +7.69% Zagreb 1944.18 1940.56 +0.19% +11.17% Belgrade <.BELEX15 746.67 747.70 -0.14% -1.97% > Sofia 558.51 557.44 +0.19% -6.05% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=RR 1.2500 -0.0040 +196bps +0bps > 5-year <CZ5YT=RR 1.0340 0.0090 +176bps +2bps > 10-year <CZ10YT=R 1.2470 0.0040 +174bps +1bps R> Poland 2-year <PL2YT=RR 1.5070 0.0030 +222bps +1bps > 5-year <PL5YT=RR 1.6850 -0.0250 +242bps -2bps > 10-year <PL10YT=R 1.9270 -0.0070 +242bps +0bps R> FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interban k Czech Rep < 2.27 2.24 2.12 2.17 PRIBOR=> Hungary < 0.27 0.30 0.33 0.21 BUBOR=> Poland < 1.73 1.70 1.68 1.72 WIBOR=> Note: FRA are for ask prices quotes ************************************************** ************ (Reporting by Marton Dunai; Editing by Hugh Lawson)

Most CEE currencies seen returning to gains in the next year: Reuters poll

04 Oct 2019

PRAGUE Central Europe's leading currencies should firm against the euro over the next year, lifted by solid growth once global worries calm, although the expected gains will be less than previously forecast, a Reuters poll showed on Friday.

CEE MARKETS-Currencies stabilise, bond yields tick up in ECB aftermath

13 Sep 2019

By Jason Hovet PRAGUE, Sept 13 Central European currencies steadied on Friday after rallying when the European Central Bank cut interest rates deeper into negative territory and promised more bond purchases, while the region's yields ticked back up. The ECB's launch of further stimulus to stoke a euro zone economic recovery, which has lagged solid growth in central Europe, gave a quick boost to the region's assets on Friday before questions over the plans' effectiveness arose. Currencies had spiked on Thursday after the ECB action but then gave back some gains while the yield on Poland's 10-year benchmark dropped briefly below 2% before settling. It was last bid at 2.08% on Friday. Unlike with the ECB, monetary policy in central Europe remains in a wait-and-see mode. "In our view, in the coming weeks the potential for a return to historical lows is limited and 10-year bond (yields) will remain above 2 percent," PKO Bank Polski in Warsaw said. Czech bond yields also ticked up 2-5 basis points along the longer end of the curve, with 10-year paper at a mid-yield of 1.34% in Friday trading and Hungarian yields rising by up to 6 basis points, putting the 10-year benchmark yield at 2.12%. One dealer said market focus was already turning toward a U.S. Federal Reserve policy meeting along with Hungarian and Czech central bank meetings this month for more guidance. By 0844 GMT, the Hungarian forint had dropped 0.1% to 332.77 bid against the euro, just off a record low 333.46 hit this week. Poland's zloty also fell to 4.34 to the euro and the Czech crown and Romanian leu were a touch higher. Most analysts do not expect the region's central banks to follow the ECB action, and also a loosening of policy by the U.S. Fed anytime soon. "In Hungary and Czech Republic, we expect the central banks to keep rates on hold with downside risks from weaker growth in the euro area and the ECB's easing of monetary conditions to outweigh the still strong domestic demand growth and inflation pressures," Morgan Stanley said. Czech rates markets price in cuts over the next year although rates have slightly ticked up in recent weeks. ING economist Jakub Seidler in Prague said the need for Czech interest rate cuts was limited this year. Czech central bankers Marek Mora and Oldrich Dedek both told Reuters this week rate stability was likely as a solid domestic economy remains resilient so far to slowdowns abroad. CEE SNAPSH AT MARKETS OT 1044 CET CURREN CIES Latest Previo Daily Change us bid close change in 2019 EURCZK Czech <EURCZK 25.849 25.862 +0.05 -0.55% = crown => 0 5 % EURHUF Hungary <EURHUF 332.77 332.45 -0.10% -3.51% = forint => 00 00 EURPLN Polish <EURPLN 4.3403 4.3356 -0.11% -1.17% = zloty => EURRON Romania <EURRON 4.7355 4.7376 +0.04 -1.72% = n leu => % EURHRK Croatia <EURHRK 7.3950 7.3933 -0.02% +0.20 = n kuna => % EURRSD Serbian <EURRSD Retrie 117.50 #VALUE #VALUE = dinar => ving.. 00 ! ! . Note: calculated from 1800 daily CET change Latest Previo Daily Change us close change in 2019 .PX Prague 1049.7 1049.4 +0.04 +6.41 9 200 % % .BUX Budapes 40090. 40066. +0.06 +2.43 t 69 95 % % .WIG20 Warsaw <.WIG20 2197.2 2189.0 +0.37 -3.49% > 4 7 % .BETI Buchare 9216.6 9221.6 -0.05% +24.8 st 8 9 3% .SBITO Ljublja <.SBITO 850.27 851.62 -0.16% +5.72 P na P> % .CRBEX Zagreb <.CRBEX 1889.4 1891.7 -0.12% +8.04 > 3 9 % .BELEX Belgrad <.BELEX 763.80 762.59 +0.16 +0.28 15 e 15> % % .SOFIX Sofia <.SOFIX 577.43 578.01 -0.10% -2.86% > BONDS Yield Yield Spread Daily (bid) change vs change Bund in Czech spread Republi c CZ2YT= <CZ2YT= 1.2740 0.0540 +195b +3bps RR 2-year RR> ps CZ5YT= <CZ5YT= 1.1340 -0.038 +188b -7bps RR 5-year RR> 0 ps CZ10YT <CZ10YT 1.3940 0.0540 +189b +1bps =RR 10-year =RR> ps Poland PL2YT= <PL2YT= 1.5720 0.0110 +225b -1bps RR 2-year RR> ps PL5YT= <PL5YT= 1.8560 0.0430 +260b +1bps RR 5-year RR> ps PL10YT <PL10YT 2.0870 0.0580 +258b +2bps =RR 10-year =RR> ps FORWARD RATE AGREEM ENT 3x6 6x9 9x12 3M interb ank Czech <CZKFRA 2.11 2.01 1.99 2.14 Rep ><PRIBO R=> Hungary <HUFFRA 0.26 0.30 0.33 0.21 ><BUBOR => Poland <PLNFRA 1.73 1.71 1.69 1.72 ><WIBOR => Note: are for ask FRA prices quotes **************************************** ********************** (Reporting by Jason Hovet in Prague, Krisztina Than in Budapest and Alan Charlish in Warsaw; editing by Emelia Sithole-Matarise)

Czech interest rates going nowhere for next 12 months - cenbank Mora

11 Sep 2019

PRAGUE, Sept 11 Czech interest rates should stay on an even keel over the next year to keep domestic inflationary pressures under control even while global central banks shift to policy easing, Czech National Bank Vice-Governor Marek Mora said in an interview.

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