* Global sentiment improves, triggers fx and stocks rebound
* Czech central bankers reiterates gradual rate hikes are
* Hungarian mortgage scheme less painful to banks than
* OTP, FHB banks rise boosts Budapest stock index to record
By Sandor Peto and Jason Hovet
BUDAPEST/PRAGUE, May 19 Central European
currencies and stocks rebounded on Friday, with Budapest's stock
index hitting a record high.
A batch of domestic news also improved the outlook of
financial sector stocks in the region.
A Czech central banker reiterated the possibility of gradual
rate hikes and a deal in Hungary about a certified mortgage
lending scheme put less stress on banks' spreads than expected.
The forint and the leu firmed 0.2
percent against the euro by 0853 GMT, the zloty gained
0.3 percent and the Czech crown 0.1 percent.
Czech central bank (CNB) board member Marek Mora said in an
interview in the Hospodarske Noviny daily that the bank should
raise interest rates slowly and gradually, but a lack of
exchange rate rise may lead to a faster path.
The CNB is the first central bank in the region to flag that
a reversal of years of interest rate cuts may be near.
Early last month, the bank opened the way for a firming of
the crown, which can push inflation lower, removing a cap which
had kept the currency weaker than 27 since 2013.
The currency has firmed less than investors, who have bought
tens of billions of euros worth of crowns, had expected.
"If the koruna (crown) does not significantly strengthen to
less than EUR/CZK 26 we may see the CNB decide - for the first
time in almost 10 years - to hike its 2W (two-week) repo rate
this year," Komercni analysts said in a note.
It traded at 26.558 to the euro.
The region's main currencies and stock indices are near
multi-week or even multi-year highs despite a fall this week due
to the worries over U.S. President Donald Trump's future.
Investors also watch Brazil's corruption crisis and economic
woes, a fixed income trader said.
"If the trouble in Latin America is big, investors may sell
assets here (in Central Europe) as well, because these markets
remain liquid," the trader said. "If the trouble is not so big,
they may even channel funds here."
The latest data from the region confirmed that its economies
growing at robust rates, partly fuelled by surging wages,
without signs of a surge in inflation or budget deficits, at
least for now.
Hungary's central bank launched a set of measures to boost
competition in recovering mortgage lending. The maximum 350
basis point lending spread in the voluntary scheme was below
earlier hints of a more painful 250 basis points.
A jump in the shares of OTP Bank and mortgage
lender FHB boosted Budapest's stock index to a record
CEE MARKETS SNAPSH AT 1053 CET
Latest Previo Daily Change
bid close change in
Czech crown 26.558 26.572 +0.05 1.69%
0 0 %
Hungary 309.15 309.85 +0.23 -0.11%
forint 00 50 %
Polish zloty 4.2069 4.2206 +0.32 4.68%
Romanian leu 4.5605 4.5696 +0.20 -0.56%
Croatian 7.4535 7.4535 +0.00 1.36%
Serbian 122.89 123.00 +0.09 0.37%
dinar 00 00 %
Note: daily calculated previo close 1800
change from us at CET
Latest Previo Daily Change
close change in
Prague 1015.8 1011.7 +0.41 +10.2
3 1 % 2%
Budapest 34736. 34528. +0.60 +8.54
55 85 % %
Warsaw 2305.2 2295.1 +0.44 +18.3
9 4 % 5%
Bucharest 8464.7 8430.3 +0.41 +19.4
5 3 % 7%
Ljubljana 786.06 777.16 +1.15 +9.54
Zagreb 1864.1 1867.1 -0.16% -6.55%
Belgrade 738.63 731.38 +0.99 +2.96
Sofia 658.96 659.51 -0.08% +12.3
Yield Yield Spread Daily
(bid) change vs change
2-year -0.084 0.051 +060b +4bps
5-year 0.068 0.082 +043b +8bps
10-year 0.836 -0.01 +047b -2bps
2-year 1.957 0.009 +264b -1bps
5-year 2.784 0.018 +314b +1bps
10-year 3.343 0.001 +298b -1bps
FORWARD RATE AGREEMENT
3x6 6x9 9x12 3M
Czech Rep <PR 0.37 0.45 0.55 0
Hungary <BU 0.19 0.24 0.34 0.15
Poland <WI 1.76 1.79 1.82 1.73
Note: FRA are for ask
(Additional reporting by Aleksandar Vasovic in Belgrade/Radu
Marinas in Bucharest/Bartosz Chmielewski in Warsaw)