-+undefined NaN%
-+undefined NaN%
-+undefined NaN%

CEE MARKETS-Crown hangs around 24/euro while other FX ease back

Reuters · 01/06/2023 05:00
CEE MARKETS-Crown hangs around 24/euro while other FX ease back

By Jason Hovet


- The Czech crown bucked weakening pressures in central Europe on Friday, gaining a touch to hang 12-year highs, while Hungary's forint pulled back from four-month highs.

The two currencies have led gains early in 2023 but markets were starting to cool somewhat, with stocks in Prague .PX and Budapest .BUX edging lower amid more subdued global sentiment as investors eyed the U.S. -farm payrolls report due later in the day.

U.S. job market data on Thursday highlighted chances of the Federal Reserve keeping its aggressive rate hike path, which boosted the dollar and hurt interest in riskier emerging markets like in central Europe.

The forint EURHUF= dropped 0.2% to 396.50 to the euro in mid-morning trade. Poland's zloty EURPLN= was down 0.2% at 4.698 per euro while local markets were closed for a holiday. The Romanian leu EURRON= was steady at 4.93.

Only the crown EURCZK= gained, rising 0.2% to 24.03 to the euro, coming after the release of better-than-expected industrial output data from November and the minutes from the Czech central bank's last policy meeting on Dec. 21.

Despite some "hawkish" tones in the minutes, markets generally see stable interest rates ahead for the Czech central bank and others in central Europe - where tightening started already in 2021, before hikes by global peers.

With global banks like the Fed or European Central Bank in tightening mode, analysts expect pressure on currencies in the region in the first half of 2023 as interest rate differentials shrink and economies flirt with recession.

This is despite an early bounce so far in January, helped largely by easing energy prices.

"The more positive global environment in combination with a clear (central bank pledge to prevent crown weakening) are the main reasons for surprising crown profits," CSOB said, adding that can change quickly.

A Reuters poll on Friday showed analysts forecast the crown to weaken back to 24.50 by the end of the year, despite trading below 24 for the first time since 2011 to begin the year.

ING said also in a it saw the recent rally in central Europe starting to fade.

"The lower EUR/USD and the outlook of strong U.S. labour market data thus indicate a correction of previous gains in the CEE region," it said. "We saw some losses yesterday and we expect a continuation today.

"In our view, the most vulnerable at the moment are the leaders of the previous rally: the Czech crown and the Hungarian forint," it added.



CEE MARKETS

SNAPSHOT

AT 1045 CET






CURRENCIES







Latest

Previous

Daily

Change




bid

close

change

in 2023

EURCZK=

Czech crown

EURCZK=

24.0300

24.0790

+0.20%

+0.53%

EURHUF=

Hungary forint

EURHUF=

396.5000

395.6500

-0.21%

+0.74%

EURPLN=

Polish zloty

EURPLN=

4.6980

4.6870

-0.23%

-0.18%

EURRON=

Romanian leu

EURRON=

4.9299

4.9282

-0.03%

+0.26%

EURHRK=

Croatian kuna

EURHRK=

7.5330

7.5365

+0.05%

+0.05%

EURRSD=

Serbian dinar

EURRSD=

117.2500

117.3300

+0.07%

+0.04%


Note: daily change

calculated from



1800 CET












Latest

Previous

Daily

Change





close

change

in 2023

.PX

Prague

.PX

1241.93

1242.3100

-0.03%

+3.35%

.BUX

Budapest

.BUX

45083.15

45228.81

-0.32%

+2.94%

.BETI

Bucharest

.BETI

12152.45

12169.44

-0.14%

+4.19%

.SBITOP

Ljubljana

.SBITOP

1068.15

1066.36

+0.17%

+1.84%

.CRBEX

Zagreb

.CRBEX

2006.79

2006.79

+0.00%

+663.71%

.BELEX15

Belgrade

.BELEX15

824.61

824.61

+0.00%

+0.00%

.SOFIX

Sofia

.SOFIX

604.36

605.13

-0.13%

+0.48%











Yield

Yield

Spread

Daily




(bid)

change

vs Bund

change in


Czech Republic





spread

CZ2YT=RR

2-year

CZ2YT=RR

5.5400

-0.0390

+287bps

-6bps

CZ5YT=RR

5-year

CZ5YT=RR

4.9140

-0.0930

+255bps

-11bps

CZ10YT=RR

10-year

CZ10YT=RR

4.7340

-0.0980

+243bps

-10bps


Poland






PL2YT=RR

2-year

PL2YT=RR

6.1150

0.0120

+345bps

-1bps

PL5YT=RR

5-year

PL5YT=RR

6.0120

0.0290

+365bps

+1bps

PL10YT=RR

10-year

PL10YT=RR

6.1480

0.0030

+384bps

+1bps



FORWARD








3x6

6x9

9x12

3M interbank


Czech Rep

CZKFRAPRIBOR=

7.10

6.86

6.44

7.24


Hungary

HUFFRABUBOR=

14.10

12.50

11.11

16.15


Poland

PLNFRAWIBOR=

6.92

6.97

6.37

6.99


Note: FRA quotes

are for ask prices






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












(Reporting by Jason Hovet in Prague, Editing by William Maclean)

((jason.hovet@thomsonreuters.com))

For related  and prices, click on the codes in brackets:
All emerging market EMRG CEEU CEE/
Spot FX rates
Eastern Europe spot FX EEFX= Middle East spot FX MEFX=
Asia spot FX ASIAFX= Latin America spot FX LATAMFX=
Other and reports
World central bank CEN Economic Data Guide ECONGUIDE
Official rates GLOBAL/INT Emerging Diary EMRG/DIARY
Top events M/DIARY Diaries DIARY Diaries Index IND/DIARY