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CEE MARKETS-FX eases as markets eye week of cenbank meetings

reuters.com · 05/02/2022 05:25
CEE MARKETS-FX eases as markets eye week of cenbank meetings

By Anita Komuves

- Most central European currencies eased on Monday in thin trade as markets in London were closed for a bank holiday and traders looked ahead to a week with central bank meetings in the United States, Poland and the Czech Republic.

"This week's meetings of the MPC and the US FOMC will be of key importance for the zloty trading in May," PKO Bank wrote in a client note.

"We believe that the lack of a hawkish surprise from the Fed, which would be a rate hike of more than 50 bps, could support the quotations of emerging markets currencies versus the dollar."

The dollar held near a 20-year high on Monday as investors expected the U.S. Federal Reserve to hike rates by 50 basis points when it meets. nL5N2WU0YF

The recent strengthening of the dollar put pressure on CEE currencies and weakened them last week.

On Monday the Polish zloty EURPLN= was 0.23% lower, trading at 4.6813 per euro. The Czech crown EURCZK= eased 0.24% to 24.640 versus the common currency.

Central bankers in Poland and the Czech Republic are meeting on Thursday and both banks are widely expected to continue with rate hikes as they fight soaring inflation.

Elsewhere, the Hungarian forint EURHUF= edged down 0.01% and was trading at 378.45 to the euro.

"The massive strengthening of the dollar pushed the forint lower last week, as far as 380 per euro, but I think investors have repositioned themselves since then and I expect the forint to hold stable for a while," an FX trader in Budapest said.

"I don't think the Fed's decision will really move the forint's rate, the hike is priced in. Markets will eye the comments for the Fed's view on inflation."

PMI data published on Monday showed that the Ukraine conflict and surging prices dragged manufacturing sentiment lower in the Czech Republic and Poland in April.

Hungarian PMI, worked out under a different methodology, showed production rose and stayed on the side of expansion for a 14th month in a row. nL2N2WU076

Most stocks in the region eased, tracking European peers that fell as crucial China data fueled market speculation of a sharp slowdown in the world's second-largest economy. nL3N2WU0MV

Stocks in Warsaw .WIG20 were 1.38% lower while Prague .PX weakened 1.17%. Budapest .BUX slid 1.66% while Bucharest .BETI was little moved.




CEE MARKETS

SNAPSHOT

AT 1041 CET






CURRENCIES







Latest

Previous

Daily

Change




bid

close

change

in 2022

EURCZK=

Czech crown

EURCZK=

24.6400

24.5800

-0.24%

+0.94%

EURHUF=

Hungary forint

EURHUF=

378.4500

378.4000

-0.01%

-2.39%

EURPLN=

Polish zloty

EURPLN=

4.6813

4.6704

-0.23%

-1.93%

EURRON=

Romanian leu

EURRON=

4.9480

4.9500

+0.04%

+0.00%

EURHRK=

Croatian kuna

EURHRK=

7.5620

7.5665

+0.06%

-0.59%

EURRSD=

Serbian dinar

EURRSD=

117.6300

117.6700

+0.03%

-0.04%


Note: daily change

calculated from


1800 CET












Latest

Previous

Daily

Change





close

change

in 2022

.PX

Prague

.PX

1317.99

1333.6300

-1.17%


.BUX

Budapest

.BUX

42749.31

43469.84

-1.66%

-15.72%

.WIG20

Warsaw

.WIG20

1832.40

1858.12

-1.38%

-19.17%

.BETI

Bucharest

.BETI

12722.92

12723.23

-0.00%

-2.59%

.SBITOP

Ljubljana

.SBITOP

1171.97

1170.06

+0.16%

-6.65%

.CRBEX

Zagreb

.CRBEX

2126.15

2129.32

-0.15%

+2.25%

.BELEX15

Belgrade

.BELEX15

827.16

827.16

+0.00%

+0.78%

.SOFIX

Sofia

.SOFIX

619.03

619.03

+0.00%

-2.62%











Yield

Yield

Spread

Daily




(bid)

change

vs Bund

change in


Czech Republic





spread

CZ2YT=RR

2-year

CZ2YT=RR

5.2220

-0.0060

+500bps

-5bps

CZ5YT=RR

5-year

CZ5YT=RR

4.6710

0.0320

+403bps

+7bps

CZ10YT=RR

10-year

CZ10YT=RR

4.3420

-0.0280

+343bps

+0bps


Poland






PL2YT=RR

2-year

PL2YT=RR

6.6520

-0.1310

+643bps

-17bps

PL5YT=RR

5-year

PL5YT=RR

6.9250

0.0670

+628bps

+10bps

PL10YT=RR

10-year

PL10YT=RR

6.4270

0.0280

+552bps

+5bps



FORWARD








3x6

6x9

9x12

3M interbank


Czech Rep

CZKFRAPRIBOR=

6.09

6.09

6.02

5.47


Hungary

HUFFRABUBOR=

7.90

8.22

8.32

6.76


Poland

PLNFRAWIBOR=

7.66

7.69

7.66

6.05


Note: FRA quotes

are for ask prices





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




(Additional reporting by Alan Charlish in Warsaw; Editing by Andrew Heavens)

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

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