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CEE MARKETS-Forint falls on uncertainty over pace of Hungarian rate hikes

CEE MARKETS-Forint falls on uncertainty over pace of Hungarian rate hikes

reuters.com · 11/11/2021 05:07
CEE MARKETS-Forint falls on uncertainty over pace of Hungarian rate hikes

By Anita Komuves

- The Hungarian forint dropped on Thursday as a firmer dollar pressured emerging market currencies and uncertainty prevailed over the pace of the Hungarian central bank's policy tightening ahead of its meeting next week.

The dollar rose to 20-month highs against the euro and other currencies on Thursday after the hottest U.S. inflation reading in a generation that encouraged bets on interest rate hikes. L8N2S22ZL

"Most emerging currencies are weakening due to the jump in the dollar, this is the key factor today," an FX trader in Budapest said.

The forint EURHUF= slid 0.46% to 365.00 against the greenback as investors turned their attention to the central bank's rate-setting meeting next Tuesday when more tightening is expected.

"The uncertainty ahead of the rate meeting is adding to the forint's woes," another trader said. "Everyone is trying to figure out how far the bank is willing to go. Investors agree that a 15 basis-point hike is not going to be enough."

The National Bank of Hungary (NBH) slowed the pace of its tightening in September and hiked its base rate by 15 basis points in September and then in October again.

A Reuters poll of analysts expects a 30 basis-point hike to 2.1% on Tuesday after larger-than-expected hikes by the Czech and Polish central banks and a surge in inflation that appears to have caught the NBH off guard. nL8N2S05HQ

Hungarian inflation jumped to 6.5% year-on-year in October.

The Czech crown EURCZK= held stable, supported by an unexpected 125-basis-point rate hike last week and a jump in October inflation data published on Wednesday that fuelled expectations of another hefty rate hike.

The Romanian leu EURRON= was a touch higher after the central bank significantly lifted its annual inflation forecast, expecting inflation to reach 7.5% in December, compared with a previous forecast of 5.6%. nL1N2S20IH

Stock markets in the region were mixed, with Budapest .BUX adding 0.56% while Prague .PX slid 0.02%.

Markets in Poland were closed on Thursday for a national holiday.





CEE MARKETS

SNAPSHOT

AT 1021 CET






CURRENCIES







Latest

Previous

Daily

Change




bid

close

change

in 2021

EURCZK=

Czech crown

EURCZK=

25.2050

25.2070

+0.01%

+4.06%

EURHUF=

Hungary forint

EURHUF=

365.0000

363.3200

-0.46%

-0.62%

EURPLN=

Polish zloty

EURPLN=

4.6343

4.6100

-0.52%

-1.62%

EURRON=

Romanian leu

EURRON=

4.9490

4.9494

+0.01%

-1.70%

EURHRK=

Croatian kuna

EURHRK=

7.5110

7.5130

+0.03%

+0.49%

EURRSD=

Serbian dinar

EURRSD=

117.5500

117.6250

+0.06%

+0.02%


Note: daily change

calculated from


1800 CET












Latest

Previous

Daily

Change





close

change

in 2021

.PX

Prague

.PX

1373.39

1373.7100

-0.02%

+33.71%

.BUX

Budapest

.BUX

53689.50

53389.23

+0.56%

+27.51%

.WIG20

Warsaw

.WIG20

2366.59

2366.59

+0.00%

+19.28%

.BETI

Bucharest

.BETI

12809.25

12779.74

+0.23%

+30.63%

.SBITOP

Ljubljana

.SBITOP

1213.46

1209.14

+0.36%

+34.70%

.CRBEX

Zagreb

.CRBEX

2006.85

2004.32

+0.13%

+15.38%

.BELEX15

Belgrade

.BELEX15

806.30

806.30

+0.00%

+7.71%

.SOFIX

Sofia

.SOFIX

604.62

603.70

+0.15%

+35.10%











Yield

Yield

Spread

Daily




(bid)

change

vs Bund

change in


Czech Republic





spread

CZ2YT=RR

2-year

CZ2YT=RR

3.2840

0.0120

+400bps

+2bps

CZ5YT=RR

5-year

CZ5YT=RR

2.9630

0.0260

+350bps

+3bps

CZ10YT=RR

10-year

CZ10YT=RR

2.7790

0.0160

+302bps

+1bps


Poland






PL2YT=RR

2-year

PL2YT=RR

2.9900

0.0300

+371bps

+4bps

PL5YT=RR

5-year

PL5YT=RR

2.9830

0.0000

+352bps

+0bps

PL10YT=RR

10-year

PL10YT=RR

2.9200

0.0000

+316bps

+0bps



FORWARD








3x6

6x9

9x12

3M interbank


Czech Rep

CZKFRAPRIBOR=

4.11

4.06

3.98

3.09


Hungary

HUFFRABUBOR=

3.28

3.88

4.21

2.11


Poland

PLNFRAWIBOR=

2.97

3.25

3.34

1.58


Note: FRA quotes

are for ask prices





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













(Reporting by Anita Komuves in Budapest; Editing by Aditya Soni)

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

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