March 11, 2019 / 10:44 AM / 3 months ago

CEE MARKETS-Czech CPI rise fails to support crown as dollar gains

    * Czech inflation picks up more than expected
    * Global growth concern overshadows Czech CPI rise
    * Czech central bank chief sees two-way growth risks
    * Bucharest outperforms rise in regional equities

    By Sandor Peto
    BUDAPEST, March 11 (Reuters) - The crown weakened Monday,
failing to benefit from a pick-up in Czech inflation, amid
uncertainty over Britain's exit from the European Union and
slowing global economic growth.
    Czech annual inflation rose to 2.7 percent in February,
drifting further away from the central bank's 2 percent target.
But the bank is not expected to raise interest rates at its next
meeting, on March 28, which would help the crown. 
    Consequently, the crown was trading at 25.658
against the euro at 0929 GMT, slightly weaker from Friday.
    The dollar gained on Monday amid global growth
concerns, and dollar buying kept Central European currencies
under pressure.
    Even before the inflation figures, Jiri Rusnok, the head of
the central bank, said he saw two-way risks to domestic economic
growth.
    The central bank of Poland projected on Monday 3.5 to 4
percent growth rates and inflation rising to 2.1 percent by
2021, still below the mid-point of its 1.5 to 3.5 percent target
range. The zloty was steady at 4.2966
versus the euro.
    Hungary reported a 382 million-euro surplus in its January
trade balance on Monday, below forecasts for a 450 million-euro
surplus. The forint slipped eased to 315.4 to the
euro.
    A slowdown in Hungary's domestic consumption means that a
strong trade surplus will continue to support the forint,
Takarekbank analysts said in a note.  
    Slovak and Slovenian January industrial output figures
released on Monday showed 7.2 and 5.8 percent annual growth,
indicated a good start of the year there.
    Bucharest led a rise in the region's main stock
indexes, gaining more than 1 percent.
    On March 2, the rating agency Fitch gave Romania two weeks
for measures that might prevent a downgrade in its neutral
credit rating outlook, and hopes for changes in new taxes have
helped the country's stock regain ground.
    
            CEE       SNAPSHOT   AT                         
            MARKETS             1029 CET            
                      CURRENCI                              
                      ES                            
                      Latest    Previous  Daily     Change
                      bid       close     change    in 2019
 Czech      <EURCZK=   25.6580   25.6500    -0.03%    +0.19%
 crown      >                                       
 Hungary    <EURHUF=  315.4000  315.2500    -0.05%    +1.80%
 forint     >                                       
 Polish     <EURPLN=    4.2966    4.2980    +0.03%    -0.16%
 zloty      >                                       
 Romanian   <EURRON=    4.7470    4.7450    -0.04%    -1.96%
 leu        >                                       
 Croatian   <EURHRK=    7.4120    7.4156    +0.05%    -0.03%
 kuna       >                                       
 Serbian    <EURRSD=  117.9200  118.0300    +0.09%    +0.32%
 dinar      >                                       
 Note:      calculated from               1800 CET          
 daily                                              
 change                                             
                                                            
                      Latest    Previous  Daily     Change
                                close     change    in 2019
 Prague                1062.12  1061.450    +0.06%    +7.66%
                                       0            
 Budapest             40400.73  40288.44    +0.28%    +3.22%
 Warsaw                2306.51   2298.97    +0.33%    +1.31%
 Bucharest             7925.97   7844.33    +1.04%    +7.34%
 Ljubljana  <.SBITOP    871.15    872.96    -0.21%    +8.32%
            >                                       
 Zagreb                1760.69   1762.92    -0.13%    +0.68%
 Belgrade   <.BELEX1    695.14    695.14    +0.00%    -8.74%
            5>                                      
 Sofia                  584.40    582.51    +0.32%    -1.69%
                      BONDS                                 
                      Yield     Yield     Spread    Daily
                      (bid)     change    vs Bund   change
                                                    in
 Czech                                              spread
 Republic                                           
   2-year   <CZ2YT=R    1.8910    0.1160   +243bps    +12bps
            R>                                      
   5-year   <CZ5YT=R    1.8010    0.0150   +218bps     +2bps
            R>                                      
   10-year  <CZ10YT=    1.8840    0.0070   +182bps     +2bps
            RR>                                     
 Poland                                                     
   2-year   <PL2YT=R    1.6100    0.0030   +214bps     +0bps
            R>                                      
   5-year   <PL5YT=R    2.2230    0.0020   +260bps     +1bps
            R>                                      
   10-year  <PL10YT=    2.8740    0.0040   +281bps     +2bps
            RR>                                     
            FORWARD   RATE      AGREEMEN                    
                                T                   
                      3x6       6x9       9x12      3M
                                                    interban
                                                    k
 Czech Rep                2.18      2.24      2.26      2.03
            <PRIBOR=                                
            >                                       
 Hungary                  0.40      0.64      0.84      0.14
                                                    
 Poland                   1.74      1.74      1.73      1.72
                                                    
 Note: FRA  are for ask prices                              
 quotes                                             
 *************************************************          
 *************                                      
 
 (Additional reporting by Luiza Ilie in Bucharest, editing by
Larry King)
  
 
 
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