June 10, 2020 / 9:51 AM / a month ago

CEE MARKETS-Currencies ease as markets await Fed projections

    By Anita Komuves
    BUDAPEST, June 10 (Reuters) - Central European currencies
eased and stocks were mixed on Wednesday morning ahead of the
U.S. Federal Reserve's first economic projections since the
COVID-19 pandemic set off a recession in February.
    Fresh inflation data shed light on the effects of the
pandemic in the CEE region where some countries had battled
rising inflation before lockdown measures brought their
economies to a virtual halt.
    Czech consumer prices rose 2.9% year-on-year in May, falling
within the central bank's target range.
    Hungarian headline inflation slowed to an annual 2.2% in
May. The central bank targets 3% headline inflation with a
tolerance band of a percentage point on either side.

    Slower inflation is better news for the forint because it
means that the real interest rate is rising, a client note from
Commerzbank said. 
    "Whether or not the central bank will be able to raise rates
after the departure of deputy governor Marton Nagy is a less
pertinent concern in the medium-term because the situation for a
rate hike is unlikely to arise," they added.
    The Hungarian parliament held a confirmation hearing on
Tuesday for Barnabas Virag, nominee for deputy governor of the
central bank. 
    Former Deputy Governor Nagy unexpectedly resigned last
month, raising questions about the future direction of the
bank's monetary policy.
    The forint was stable, trading at 344.25 versus the euro at
0810 GMT.
    "The forint has been stuck at this level for a few days and
outperforms regional peers slightly," a Budapest-based currency
trader said. 
    "Hungary could come out of the crisis better than expected,
and since the Polish rate cut the Hungarian interest rates could
be considered high," he added. 
    Hungary's central bank was the most dovish in the region
until a rate hike on April 1. 
    The Polish central bank unexpectedly cut rates for a third
time on May 28 in a bid to help the coronavirus-hit economy.



            CEE        SNAPSHOT    AT                         
            MARKETS               1010 CET            
                       CURRENCIE                              
                       S                              
                       Latest     Previous  Daily     Change
                       bid        close     change    in 2020
 Czech                   26.6000   26.5580    -0.16%    -4.39%
 crown                                                
 Hungary                344.2500  344.1800    -0.02%    -3.81%
 forint                                               
 Polish                   4.4548    4.4465    -0.19%    -4.45%
 zloty                                                
 Romanian                 4.8340    4.8330    -0.02%    -0.95%
 leu                                                  
 Croatian                 7.5690    7.5695    +0.01%    -1.63%
 kuna                                                 
 Serbian                117.4500  117.5800    +0.11%    +0.10%
 dinar                                                
 Note:      calculated from                 1800 CET          
 daily                                                
 change                                               
                                                              
                       Latest     Previous  Daily     Change
                                  close     change    in 2020
 Prague                   952.47  945.0800    +0.78%   -14.62%
 Budapest               37836.21  37879.48    -0.11%   -17.90%
 Warsaw                  1828.93   1835.59    -0.36%   -14.94%
 Bucharest               8828.71   8813.53    +0.17%   -11.51%
 Ljubljana                870.98    865.24    +0.66%    -5.93%
 Zagreb                  1662.34   1658.32    +0.24%   -17.60%
 Belgrade   <.BELEX15     676.58    680.81    -0.62%   -15.61%
            >                                         
 Sofia                    464.35    465.68    -0.29%   -18.27%
                                                              
                       Yield      Yield     Spread    Daily
                       (bid)      change    vs Bund   change
                                                      in
 Czech                                                spread
 Republic                                             
   2-year   <CZ2YT=RR     0.1730    0.0960   +079bps    +10bps
            >                                         
   5-year   <CZ5YT=RR     0.5230   -0.0410   +109bps     -3bps
            >                                         
   10-year  <CZ10YT=R     0.9660    0.0010   +129bps     +2bps
            R>                                        
 Poland                                                       
   2-year   <PL2YT=RR     0.2430    0.0020   +086bps     +1bps
            >                                         
   5-year   <PL5YT=RR     0.8440    0.0170   +142bps     +2bps
            >                                         
   10-year  <PL10YT=R     1.4060    0.0000   +173bps     +2bps
            R>                                        
            FORWARD                                           
                       3x6        6x9       9x12      3M
                                                      interban
                                                      k
 Czech Rep          <       0.30      0.34      0.39      0.34
            PRIBOR=>                                  
 Hungary            <       0.79      0.75      0.70      0.90
            BUBOR=>                                   
 Poland             <       0.24      0.25      0.28      0.27
            WIBOR=>                                   
 Note: FRA  are for ask prices                                
 quotes                                               
 ***************************************************          
 ***********                                          
 

 (Reporting by Anita Komuves in Budapest; Editing by
Ramakrishnan M.)
  
 
 
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