October 8, 2019 / 9:47 AM / 10 days ago

CEE MARKETS-Currencies inch lower as investors weigh data, global tensions

    WARSAW, Oct 8 (Reuters) - The Hungarian forint and Czech
crown inched lower in mid-morning trade on Tuesday, as investors
digested local economic data and kept a cautious eye on
U.S.-China trade talks later this week and the prospects of a
disorderly 'no-deal' Brexit.
    Prospects for progress in U.S.-China trade talks dimmed
after Washington blacklisted Chinese companies over Beijing's
treatment of predominantly Muslim ethnic minorities, while a
source was quoted as saying Britain will take an aggressive
stance towards the European Union if Brexit talks break down.

    At 0908 GMT, the Czech crown was bid down 0.11% at
25.794 to the euro and the Hungarian forint was down
0.16% at 333.96. The Polish zloty was little changed
at 4.33 to the euro.
    Hungarian inflation continued to decline in September,
comforting the central bank in its view that rates should remain
on hold in view of downward inflation risks as the European
economy slows.
    Hungarian headline inflation slowed to an
annual 2.8% in September from 3.1% in August, coming in below
the forecast of 3% in a Reuters poll.
    "Overall, I believe the recent incoming data won't change
the monetary stance of the National Bank of Hungary, it will
just support the central bank's view that they need to stick to
the wait-and-see-stance," said Peter Virovacz, senior economist
with ING in Hungary.
    "I believe with this data ... the market will rather focus
on the external story."
    In the Czech Republic, industrial data on Monday showed some
of the first signs of slowdown creeping into the economy,
analysts said. 
    However, unemployment was unchanged at 2.7% in September,
according to data issued on Tuesday, in line with analysts'
forecasts and near the all-time low of 2.6% seen in May and
June. Czech retail sales, excluding cars, rose by 3.7%
year-on-year in August, slower than analysts had expected.

    The crown has shown little reaction to data and a continued
rate hike debate among central bankers after a minority of two
rate setters supported raising borrowing costs at the last
meeting on Sept. 25.
    A Prague trader said the global mood would remain the driver
for the currency.
    "I think the global environment is still the biggest player
on EUR/CZK versus rather than the hawkish (central bank)," the
trader said. "Today's and yesterday's data was with no big
impact. The last two days there were really low volumes."
    Bond yields also remained broadly flat, with Polish 10-year
paper trading at 1.885% and Czech 10-year yields
 at 1.255% at 0914 GMT.
    Stocks were mixed, with Budapest's main index down
0.58% and Warsaw's WIG 20 index up 0.53%.
    
                  CEE      SNAPSH   AT                   
                  MARKETS  OT      1125            
                                   CET             
                           CURREN                        
                           CIES                    
                           Latest  Previo  Daily   Change
                                   us              
                           bid     close   change  in
                                                   2019
 EURCZK  Czech    <EURCZK  25.790  25.771  -0.07%  -0.32%
 =       crown    =>            0       5          
 EURHUF  Hungary  <EURHUF  334.00  333.60  -0.12%  -3.87%
 =       forint   =>           00      50          
 EURPLN  Polish   <EURPLN  4.3305  4.3282  -0.05%  -0.94%
 =       zloty    =>                               
 EURRON  Romania  <EURRON  4.7480  4.7470  -0.02%  -1.98%
 =       n leu    =>                               
 EURHRK  Croatia  <EURHRK  7.4260  7.4215  -0.06%  -0.22%
 =       n kuna   =>                               
 EURRSD  Serbian  <EURRSD  117.39  117.51   +0.10   +0.78
 =       dinar    =>           00      00       %       %
         Note:    calculated from          1800          
         daily                             CET     
         change                                    
                                                         
                           Latest  Previo  Daily   Change
                                   us              
                                   close   change  in
                                                   2019
 .PX     Prague            1001.8  1000.5   +0.13   +1.55
                                5     300       %       %
 .BUX    Budapes           39568.  39803.  -0.59%   +1.10
         t                     02      96               %
 .WIG20  Warsaw   <.WIG20  2130.6  2121.8   +0.41  -6.41%
                  >             0       7       %  
 .BETI   Buchare           9504.1  9546.3  -0.44%   +28.7
         st                     7       3              2%
 .SBITO  Ljublja  <.SBITO  862.97  863.64  -0.08%   +7.30
 P       na       P>                                    %
 .CRBEX  Zagreb   <.CRBEX  1929.5  1929.5   +0.00   +10.3
                  >             5       5       %      4%
 .BELEX  Belgrad  <.BELEX  750.63  749.37   +0.17  -1.45%
 15      e        15>                           %  
 .SOFIX  Sofia    <.SOFIX  562.41  563.12  -0.13%  -5.39%
                  >                                
                           BONDS                         
                           Yield   Yield   Spread  Daily
                           (bid)   change  vs      change
                                           Bund    in
         Czech                                     spread
         Republi                                   
         c                                         
 CZ2YT=           <CZ2YT=  1.2680  0.0360   +204b   +5bps
 RR      2-year   RR>                          ps  
 CZ5YT=           <CZ5YT=  1.0420  -0.082   +185b   -8bps
 RR      5-year   RR>                   0      ps  
 CZ10YT           <CZ10YT  1.2550  -0.005   +183b   +0bps
 =RR     10-year  =RR>                  0      ps  
         Poland                                          
 PL2YT=           <PL2YT=  1.5010  0.0050   +227b   +2bps
 RR      2-year   RR>                          ps  
 PL5YT=           <PL5YT=  1.6420  -0.002   +245b   +0bps
 RR      5-year   RR>                   0      ps  
 PL10YT           <PL10YT  1.8840  -0.005   +246b   +0bps
 =RR     10-year  =RR>                  0      ps  
                  FORWARD  RATE    AGREEM                
                                   ENT             
                           3x6     6x9     9x12    3M
                                                   interb
                                                   ank
         Czech    <CZKFRA    2.26    2.21    2.04    2.17
         Rep      ><PRIBO                          
                  R=>                              
         Hungary  <HUFFRA    0.26    0.31    0.34    0.21
                  ><BUBOR                          
                  =>                               
         Poland   <PLNFRA    1.74    1.72    1.67    1.72
                  ><WIBOR                          
                  =>                               
         Note:    are for ask                            
         FRA      prices                           
         quotes                                    
         ****************************************        
         **********************                    
                                                         
    
    

 (Reporting by Alan Charlish in Warsaw, Jason Hovet in Prague
and Radu-Sorin Marinas in Bucharest)
  
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