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CEE MARKETS-Crown extends gains supported by potential policy tightening in 2021

· 02/05/2021 06:02
CEE MARKETS-Crown extends gains supported by potential policy tightening in 2021

By Anita Komuves

- The Czech crown extended gains on Friday and hit its strongest levels since the start of the pandemic, a day after the central bank left its key policy rate unchanged and left the door open to the start of policy tightening later in 2021.

The Czech crown EURCZK= outperformed its regional peers and firmed 0.22% to 25.822 per euro after hitting an 11-month high in the previous session. The currency was bolstered by potential rate hike prospects this year, dealers said.

The central bank also said that longer-than-expected lockdowns to fight the pandemic could reduce the need to raise rates. The bank also raised its 2021 growth forecast to 2.2%.nL8N2KA5ML

This week's global risk-on mood driven by vaccine news and optimism over U.S. President Joe Biden's proposed $1.9 trillion stimulus package also helped CEE currencies, a Budapest-based FX trader said.

The Hungarian forint EURHUF= was flat, slightly weaker than its 200-day moving average around 355 per euro, a level that it strengthened to at the start of the week.

The Polish zloty EURPLN= edged up 0.08% to trade at 4.4973, stronger than the 4.50 level that economists say could trigger a central bank intervention.

A Reuters poll of analysts sees the zloty and the crown leading gains in the region this year as economies recover from the coronavirus pandemic.

However, analysts expect that an early leap in the forint to start 2021 may have run out of room: the forint was forecast to be barely moved from its current level. nL8N2KA5CY

Analysts, however, say that a faster vaccine rollout and faster economic recovery in Hungary could further support the forint.

Hungary's vaccination drive will accelerate and could potentially enable the country to ease coronavirus restrictions in April after Easter, Prime Minister Viktor Orban said on Thursday.

Orban said on Friday that Hungary may start inoculating people with Russia's Sputnik V COVID-19 vaccine next week. nL1N2KB0GJnL8N2KA37F

Hungary's industrial output rose by an annual 5.8% in December based on preliminary unadjusted data, exceeding analyst forecasts. nS8N2HV05A

Stocks in the region were stronger with Warsaw .WIG20 leading gains and adding 1.57%.



CEE MARKETS

SNAPSHOT

AT 1056 CET






CURRENCIES







Latest

Previous

Daily

Change




bid

close

change

in 2021

EURCZK=

Czech crown

EURCZK=

25.8220

25.8780

+0.22%

+1.58%

EURHUF=

Hungary forint

EURHUF=

356.4000

356.1500

-0.07%

+1.77%

EURPLN=

Polish zloty

EURPLN=

4.4973

4.5010

+0.08%

+1.38%

EURRON=

Romanian leu

EURRON=

4.8755

4.8741

-0.03%

-0.22%

EURHRK=

Croatian kuna

EURHRK=

7.5600

7.5705

+0.14%

-0.17%

EURRSD=

Serbian dinar

EURRSD=

117.5000

117.6000

+0.09%

+0.06%


Note: daily change

calculated from


1800 CET












Latest

Previous

Daily

Change





close

change

in 2021

.PX

Prague

.PX

1057.57

1050.9200

+0.63%

+2.96%

.BUX

Budapest

.BUX

44261.46

44226.34

+0.08%

+5.12%

.WIG20

Warsaw

.WIG20

1957.18

1927.02

+1.57%

-1.35%

.BETI

Bucharest

.BETI

10538.02

10504.65

+0.32%

+7.47%

.SBITOP

Ljubljana

.SBITOP

946.45

945.97

+0.05%

+5.06%

.CRBEX

Zagreb

.CRBEX

1791.64

1790.88

+0.04%

+3.01%

.BELEX15

Belgrade

.BELEX15

736.69

729.20

+1.03%

-1.59%

.SOFIX

Sofia

.SOFIX

497.02

498.34

-0.26%

+11.06%











Yield

Yield

Spread

Daily




(bid)

change

vs Bund

change in


Czech Republic





spread

CZ2YT=RR

2-year

CZ2YT=RR

0.2850

-0.0130

+100bps

-1bps

CZ5YT=RR

5-year

CZ5YT=RR

0.9320

-0.0440

+162bps

-4bps

CZ10YT=RR

10-year

CZ10YT=RR

1.4290

0.0130

+189bps

+2bps


Poland






PL2YT=RR

2-year

PL2YT=RR

0.0370

-0.0450

+075bps

-4bps

PL5YT=RR

5-year

PL5YT=RR

0.4560

-0.0110

+115bps

-1bps

PL10YT=RR

10-year

PL10YT=RR

1.2550

0.0230

+171bps

+3bps



FORWARD








3x6

6x9

9x12

3M interbank


Czech Rep

CZKFRAPRIBOR=

0.42

0.50

0.84

0.36


Hungary

HUFFRABUBOR=

0.76

0.78

0.82

0.75


Poland

PLNFRAWIBOR=

0.20

0.22

0.24

0.21


Note: FRA quotes

are for ask prices





**************************************************************





(Additional reporting by Jason Hovet in Prague; Editing by Shailesh Kuber)

((komuves.anita@thomsonreuters.com (+36 70 795 8815))

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