September 20, 2019 / 9:15 AM / a month ago

CEE MARKETS-Forint strengthens, zloty looks to snap losing streak on Brexit hope

    PRAGUE, Sept 20 (Reuters) - The Hungarian forint firmed for
a third straight day on Friday, after touching a record low this
week, as central Europe's currencies edged up due to some hope
Britain could still reach a deal to avoid a disorderly exit from
the European Union.
    Markets also turned some attention to central bank meetings
next week in Hungary and the Czech Republic, where rate setters
are widely expected to hold firm with their monetary policy
despite the European Central Bank (ECB) and U.S. Federal Reserve
reverting to easing.
    A Reuters poll on Thursday showed analysts see Hungary's
central bank keeping its base rate steady even through 2020,
ignoring pressure on the forint, which has plumbed new lows.
    The forint strengthened 0.1% against the euro in
early trade on Friday, bid at 332.39, off an all-time low of
334.35. Majority of analysts in the Reuters poll predicted the
forint was unlikely to weaken to as far as 340 to the euro this
weak.
    Markets got some relief after European Commission President
Jean-Claude Juncker said on Thursday a Brexit deal was still
possible.
    Britain leaving without a deal in place at the end of
October would hurt trading in Europe, having a large effect on
central Europe's car sector-driven economies.
    The Polish zloty ticked up a touch to 4.342 to the
euro, trying to snap a week-long losing streak, while Romanian
leu also leaned firmer, gaining a touch to 4.746 and
the Czech crown was steady at 25.90 to the euro.
    The crown was in a holding pattern before the Czech central
bank meets next Wednesday. The bank had hiked interest rates for
the eighth time in two years in May, but is now guiding for
stability as it balances domestic price pressures with weakness
abroad.
    "We are staying under the relative strength of the dollar in
a slightly negative view (with the crown). If positive news
around Brexit were to be confirmed this could help central
Europe," CSOB said.
    "The crown is slowly looking now to the central bank
meeting, but rate stability by itself won't bring new life to
the currency."    
    Despite solid economic growth in central Europe, the
region's currencies have been pressured by investor worries over
a slowdown hitting from the euro zone, global trade tensions
between the United States and China, and an unclear Brexit path.
    Due to weakening trade and Brexit fears, central European
euro zone member Slovakia slashed its growth forecasts by almost
a third on Thursday, expecting 2019 economic output to expand by
2.4%, a cut of 1.1 percentage points from an earlier outlook.

    
                  CEE      SNAPSH   AT                   
                  MARKETS  OT      0956            
                                   CET             
                           CURREN                        
                           CIES                    
                           Latest  Previo  Daily   Change
                                   us              
                           bid     close   change  in
                                                   2019
 EURCZK  Czech    <EURCZK  25.900  25.896  -0.02%  -0.75%
 =       crown    =>            0       0          
 EURHUF  Hungary  <EURHUF  332.39  332.76   +0.11  -3.40%
 =       forint   =>           00      50       %  
 EURPLN  Polish   <EURPLN  4.3420  4.3423   +0.01  -1.21%
 =       zloty    =>                            %  
 EURRON  Romania  <EURRON  4.7455  4.7468   +0.03  -1.93%
 =       n leu    =>                            %  
 EURHRK  Croatia  <EURHRK  7.4000  7.3993  -0.01%   +0.14
 =       n kuna   =>                                    %
 EURRSD  Serbian  <EURRSD  117.42  117.52   +0.09   +0.75
 =       dinar    =>           00      00       %       %
         Note:    calculated from          1800          
         daily                             CET     
         change                                    
                                                         
                           Latest  Previo  Daily   Change
                                   us              
                                   close   change  in
                                                   2019
 .PX     Prague            1053.2  1053.3  -0.01%   +6.76
                                8     600               %
 .BUX    Budapes           40900.  40922.  -0.05%   +4.50
         t                     65      30               %
 .WIG20  Warsaw   <.WIG20  2191.7  2191.6   +0.01  -3.73%
                  >             3       1       %  
 .BETI   Buchare           9366.1  9358.8   +0.08   +26.8
         st                     7       2       %      5%
 .SBITO  Ljublja  <.SBITO  859.42  861.90  -0.29%   +6.86
 P       na       P>                                    %
 .CRBEX  Zagreb   <.CRBEX  1901.0  1897.1   +0.20   +8.70
                  >             2       6       %       %
 .BELEX  Belgrad  <.BELEX  760.29  758.45   +0.24  -0.18%
 15      e        15>                           %  
 .SOFIX  Sofia    <.SOFIX  578.67  578.99  -0.06%  -2.66%
                  >                                
                           BONDS                         
                           Yield   Yield   Spread  Daily
                           (bid)   change  vs      change
                                           Bund    in
         Czech                                     spread
         Republi                                   
         c                                         
 CZ2YT=           <CZ2YT=  1.2790  -0.047   +199b   -5bps
 RR      2-year   RR>                   0      ps  
 CZ5YT=           <CZ5YT=  1.0720  -0.003   +181b   +0bps
 RR      5-year   RR>                   0      ps  
 CZ10YT           <CZ10YT  1.3920  0.0030   +190b   +0bps
 =RR     10-year  =RR>                         ps  
         Poland                                          
 PL2YT=           <PL2YT=  1.4850  0.0000   +220b   +0bps
 RR      2-year   RR>                          ps  
 PL5YT=           <PL5YT=  1.7990  -0.014   +253b   -1bps
 RR      5-year   RR>                   0      ps  
 PL10YT           <PL10YT  2.0570  -0.017   +256b   -2bps
 =RR     10-year  =RR>                  0      ps  
                  FORWARD  RATE    AGREEM                
                                   ENT             
                           3x6     6x9     9x12    3M
                                                   interb
                                                   ank
         Czech    <CZKFRA    2.16    2.09    1.99    2.14
         Rep      ><PRIBO                          
                  R=>                              
         Hungary  <HUFFRA    0.28    0.33    0.37    0.21
                  ><BUBOR                          
                  =>                               
         Poland   <PLNFRA    1.74    1.72    1.69    1.72
                  ><WIBOR                          
                  =>                               
         Note:    are for ask                            
         FRA      prices                           
         quotes                                    
         ****************************************        
         **********************                    
                                                         
 

 (Reporting by Jason Hovet in Prague; editing by Uttaresh.V)
  
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