July 28, 2020 / 8:25 AM / 12 days ago

CEE MARKETS-Forint eases as Hungary cbank restarts bond purchases

    BUDAPEST, July 28 (Reuters) - The forint eased
versus the euro early on Tuesday, underperforming central
European currencies, as the National Bank of Hungary (NBH)
relaunched government bond purchases after a two-month hiatus.

    At 0813 GMT, the forint, the region's worst-performing unit
this year, was down 0.3% at 346.51 per euro, while most other
currencies were unchanged or marginally weaker.
    The Hungarian central bank cut its base rate by 15 basis
points to a new low of 0.6% last week and said it would start
buying longer-dated government bonds to curb borrowing costs on
longer maturities.
    The bank, which launched the purchases in May to bolster the
economy hit by the coronavirus pandemic, has bought 149 billion
forints worth of bonds so far, most in the 10-year segment. On
Tuesday it offered to purchase 15-year and 20-year bonds.
    Yields on those maturities have fallen by 40 to 50 basis
points since the bank announced the resumption of bond buys a
week ago and one dealer said the near-term direction of the
market would depend on the outcome of Tuesday's tender.
    "We will see how aggressive the central bank is at today's
tender," a Budapest-based bond trader said. "In May it was
rather defensive, staying close to market levels, but then it
suspended the QE programme.
    "Given that yields have plunged by 50 points in these papers
already, any continuation will depend on the central bank's
approach," he said. "If they are aggressive, yields can fall
further, if they are defensive, then not so much."
    The Czech crown was a touch weaker, retreating
from Monday's 4-1/2-month highs, with some dealers and analysts
sayinga small correction could be around the corner after recent
gains.
                   CEE      SNAPSHO   AT                      
                   MARKETS  T        1013              
                                     CET               
                            CURRENC                           
                            IES                        
                            Latest   Previou  Daily    Change
                                     s                 
                            bid      close    change   in 2020
 EURCZK  Czech     <EURCZK  26.2100  26.1850   -0.10%   -2.97%
 =       crown     =>                                  
 EURHUF  Hungary   <EURHUF  346.510  345.500   -0.29%   -4.43%
 =       forint    =>             0        0           
 EURPLN  Polish    <EURPLN   4.3933   4.3926   -0.02%   -3.12%
 =       zloty     =>                                  
 EURRON  Romanian  <EURRON   4.8315   4.8285   -0.06%   -0.89%
 =       leu       =>                                  
 EURHRK  Croatian  <EURHRK   7.5100   7.5142   +0.06%   -0.86%
 =       kuna      =>                                  
 EURRSD  Serbian   <EURRSD  117.540  117.615   +0.06%   +0.03%
 =       dinar     =>             0        0           
         Note:     calculated from            1800            
         daily                                CET      
         change                                        
                                                              
                            Latest   Previou  Daily    Change
                                     s                 
                                     close    change   in 2020
 .PX     Prague              918.05  914.020   +0.44%  -17.71%
                                           0           
 .BUX    Budapest           34933.6  34979.4   -0.13%  -24.19%
                                  0        1           
 .WIG20  Warsaw    <.WIG20  1825.36  1830.87   -0.30%  -15.10%
                   >                                   
 .BETI   Buchares           8579.50  8586.12   -0.08%  -14.01%
         t                                             
 .SBITO  Ljubljan  <.SBITO   851.74   850.08   +0.20%   -8.01%
 P       a         P>                                  
 .CRBEX  Zagreb    <.CRBEX  1584.45  1587.67   -0.20%  -21.46%
                   >                                   
 .BELEX  Belgrade  <.BELEX   658.20   663.27   -0.76%  -17.90%
 15                15>                                 
 .SOFIX  Sofia     <.SOFIX   439.87   439.88   -0.00%  -22.58%
                   >                                   
                                                              
                            Yield    Yield    Spread   Daily
                            (bid)    change   vs Bund  change
                                                       in
         Czech                                         spread
         Republic                                      
 CZ2YT=    2-year  <CZ2YT=   0.1240   0.0740   +080bp    +7bps
 RR                RR>                              s  
 CZ5YT=    5-year  <CZ5YT=   0.4000   0.0550   +108bp    +6bps
 RR                RR>                              s  
 CZ10YT            <CZ10YT   0.8490   0.0150   +134bp    +2bps
 =RR     10-year   =RR>                             s  
         Poland                                               
 PL2YT=    2-year  <PL2YT=   0.1280   0.0010   +080bp    +0bps
 RR                RR>                              s  
 PL5YT=    5-year  <PL5YT=   0.7470  -0.0110   +143bp    -1bps
 RR                RR>                              s  
 PL10YT            <PL10YT   1.3580   0.0000   +185bp    +0bps
 =RR     10-year   =RR>                             s  
                   FORWARD                                    
                            3x6      6x9      9x12     3M
                                                       interba
                                                       nk
         Czech     <CZKFRA     0.31     0.32     0.36     0.34
         Rep       ><PRIBO                             
                   R=>                                 
         Hungary   <HUFFRA     0.60     0.60     0.60     0.60
                   ><BUBOR                             
                   =>                                  
         Poland    <PLNFRA     0.19     0.20     0.21     0.24
                   ><WIBOR                             
                   =>                                  
         Note:     are for ask                                
         FRA       prices                              
         quotes                                        
 
 (Reporting by Gergely Szakacs in Budapest and Jason Hovet in
Prague
Editing by Jan Harvey and Raissa Kasolowsky)
  
 
 
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