CEE MARKETS-FX, stocks rebound ahead of ECB policy meeting
PRAGUE, July 22 (Reuters) - Central European currencies rebounded on
Thursday from losses marked this week as investors' risk aversion eased and
market focus turned to the European Central Bank (ECB), which is expected to
keep its stimulus taps fully open.
While the ECB remains dovish and looks certain to promise an even longer
period of stimulus on Thursday to back commitment to boost inflation, strong
price pressures in central Europe have already prompted the Hungarian and Czech
central banks to raise interest rates, with more moves expected.
Poland is yet to join the group, although analysts are waiting for cues it
could also turn to tighter policy sooner rather than later.
The zloty - under pressure this week like other units in central Europe by
concerns over the relentless surge in coronavirus cases worldwide - lagged gains
seen by the Hungarian forint and Czech crown this year.
On Thursday, the zloty led the region higher, strengthening 0.2%
to 4.578 to the euro by 0842 GMT.
"The risk of another wave of pandemic, as well as lower expectations for
domestic rate hikes suggest that the EUR/PLN pair will remain above 4.50 until
the end of the summer holidays," ING said.
"Later in the year, however, we expect the zloty to strengthen. We believe
that elevated inflation may prompt the (Polish central bank's) MPC to raise
rates in the coming months."
Stock indexes in the region that hit record or multi-year highs in the past
month also rebounded with global stocks on bets of a dovish ECB.
Currencies found support from the euro - the region's reference currency -
which stabilised off 3-1/2-month lows before the ECB meeting later due in the
day.
Any boost for the euro after the ECB could add to strengthening in the
region, a Prague dealer said.
The crown was up at 25.64 per euro, trailing its 30-day moving
average of 25.57.
The forint inched up 0.1% to 359.35 to the euro, aided by hawkish
comments from its central bank. Deputy Governor Barnabas Virag told financial
news website portfolio.hu in an interview published on Thursday that the bank
would continue its cycle of rate rises.
The forint has stuck in a tight range around 360 in recent trading and
dealers say it will likely hang there until the Hungarian central bank meets
next week.
CEE SNAPSHOT AT
MARKETS 1042 CET
CURRENCIES
Latest Previous Daily Change
bid close change in 2021
EURCZK Czech 25.6400 25.6900 +0.20% +2.30%
= crown
EURHUF Hungary 359.3500 359.6900 +0.09% +0.94%
= forint
EURPLN Polish 4.5775 4.5872 +0.21% -0.40%
= zloty
EURRON Romanian 4.9245 4.9244 -0.00% -1.21%
= leu
EURHRK Croatian 7.5290 7.5245 -0.06% +0.25%
= kuna
EURRSD Serbian 117.5300 117.6050 +0.06% +0.03%
= dinar
Note: calculated 1800
daily from CET
change STOCKS
Latest Previous Daily Change
close change in 2021
.PX Prague 1195.95 1188.120 +0.66% +16.43
0 %
.BUX Budapest 47933.71 47882.56 +0.11% +13.84
%
.WIG20 Warsaw 2251.02 2241.97 +0.40% +13.46
%
.BETI Buchares 11916.15 11913.24 +0.02% +21.52
t %
.SBITO Ljubljan 1133.93 1132.15 +0.16% +25.87
P a %
.CRBEX Zagreb 1917.01 1918.48 -0.08% +10.22
%
.BELEX Belgrade 772.39 770.59 +0.23% +3.18%
15
.SOFIX Sofia 565.92 563.18 +0.49% +26.45
%
BONDS
Yield Yield Spread Daily
(bid) change vs Bund change
in
Czech spread
Republic
CZ2YT= 2-year 1.4230 0.0040 +214bp +0bps
RR s
CZ5YT= 5-year 1.6380 -0.0230 +232bp -3bps
RR s
CZ10YT s
Poland
PL2YT= 2-year 0.4080 0.0250 +112bp +2bps
RR s
PL5YT= 5-year 1.0880 0.0010 +177bp +0bps
RR s
PL10YT s
FRA
3x6 6x9 9x12 3M
interba
nk
Czech
Hungary
Poland
Note: FRA quotes are
for ask prices
****************************************
********************** (Reporting by Jason Hovet in Prague, Alicja Ptak in Warsaw, and Anita Komuves
in Budapest, Editing by Sherry Jacob-Phillips)