January 8, 2020 / 10:49 AM / 2 months ago

CEE MARKETS-Stocks fall on fears over Mideast conflict, rate decisions in focus

    By Krisztina Than and Jason Hovet
    BUDAPEST/PRAGUE, Jan 8 (Reuters) - Central European stocks
fell on Wednesday as fears of an all-out conflict in the Middle
East cut risk appetite, while industrial output data in Hungary
sent a warning sign that economic slowdown could be around the
corner.
    Output in Hungary grew 3.6% in November in annual unadjusted
terms, below analyst forecasts for 6.5%, and declined for a
second straight month in month-on-month terms.
    "The main question is whether this is a temporary slowdown,
or the unfavourable turnaround that we have seen in developed
markets has reached Hungary as well," ING analyst Peter Virovacz
said in a note. 
    He said slowing growth in Germany posed a risk to Hungary's
economy but added that the output slowdown was not yet
broad-based. Hungary's finance ministry has forecast 4% growth
in gross domestic product this year, against 4.9% last year. 
    Central Europe's fast-growing economies have outpaced the
euro zone in the past few years, but the slowdown in western
export markets is expected to take its toll on the region this
year. 
    Raiffeisen said in a note that recent Czech manufacturing
data points to a severe contraction, with earlier data from
December confirming the picture of a slowdown. It said a recent
firming trend in the crown currency was not sustainable.
    The crown has reached a 23-month high this year and on
Wednesday hung around the 25.240 per euro level that dealers
said would act as key resistance in the recent firming trend.
    
    
    The Czech central bank sent hawkish messages late last year
which have supported the crown.
    The Polish zloty was a shade weaker ahead of the
central bank's rate-setting meeting, where it is expected to
keep interest rates on hold and maintain a dovish stance. 
    Investors will be watching the bank's comments after
inflation came in at a higher-than-expected 3.4% in December,
above market expectations of 2.9%.   
    The bank's governor has repeatedly said he expects rates to
remain on hold until his term ends in 2022, but in November he
added that if there was a change, it would likely be a cut. 
    "It will be crucial whether Governor Glapinski will continue
to play down the fact that CPI is running above the target,"
analysts at Santander Bank Polska said.
    Romania's central bank is also expected to keep its key
interest rate unchanged at 2.50% on Wednesday, while continuing
to sterilize excess liquidity from the money market in the
coming months. 
    "Given the increase of macroeconomic imbalances as well as
fiscal uncertainty, the central bank should not have reasons to
switch to any dovish rhetoric, despite the improvement in the
inflation outlook," Raiffeisen said in a note.       
    
                   CEE        SNAPSHOT    AT                     
                   MARKETS               1026           
                                         CET            
                              CURRENCIE                          
                              S                         
                              Latest     Previ  Daily   Change
                                         ous            
                              bid        close  change  in 2020
 EURCZK  Czech                  25.2430  25.24   +0.01     +0.75%
 =       crown                              50       %  
 EURHUF  Hungary               331.1400  331.4   +0.11     +0.00%
 =       forint                            900       %  
 EURPLN  Polish                  4.2455  4.240  -0.12%     +0.26%
 =       zloty                               4          
 EURRON  Romanian                4.7775  4.778   +0.01     +0.23%
 =       leu                                 0       %  
 EURHRK  Croatian                7.4480  7.448   +0.01     -0.03%
 =       kuna                                5       %  
 EURRSD  Serbian               117.4000  117.5   +0.12     +0.14%
 =       dinar                             400       %  
         Note:     calculated from              1800             
         daily                                  CET     
         change                                         
                                                                 
                              Latest     Previ  Daily   Change
                                         ous            
                                         close  change  in 2020
 .PX     Prague                 1112.50  1117.  -0.46%     -0.28%
                                          6400          
 .BUX    Budapest              44472.66  44490  -0.04%     -3.49%
                                           .80          
 .WIG20  Warsaw                 2121.82  2145.  -1.08%     -1.31%
                                            01          
 .BETI   Buchares               9859.71  9885.  -0.26%     -1.18%
         t                                  48          
 .SBITO  Ljubljan                937.72  933.4   +0.46     +1.28%
 P       a                                   5       %  
 .CRBEX  Zagreb                 2019.71  2028.  -0.43%     +0.11%
                                            47          
 .BELEX  Belgrade  <.BELEX15     799.55  801.6  -0.27%     -0.27%
 15                >                         9          
 .SOFIX  Sofia                   570.09  566.1   +0.69     +0.34%
                                             7       %  
                              BONDS                              
                              Yield      Yield  Spread  Daily
                              (bid)      chang  vs      change in
                                         e      Bund    
         Czech                                          spread
         Republic                                       
 CZ2YT=    2-year  <CZ2YT=RR     1.7100  0.025   +234b      +3bps
 RR                >                         0      ps  
 CZ5YT=    5-year  <CZ5YT=RR     1.4160  -0.09   +197b      -9bps
 RR                >                        00      ps  
 CZ10YT            <CZ10YT=R     1.6220  -0.01   +190b      -2bps
 =RR     10-year   R>                       80      ps  
         Poland                                                  
 PL2YT=    2-year  <PL2YT=RR     1.5420  0.001   +217b      +1bps
 RR                >                         0      ps  
 PL5YT=    5-year  <PL5YT=RR     1.9030  0.013   +246b      +2bps
 RR                >                         0      ps  
 PL10YT            <PL10YT=R     2.1970  0.010   +248b      +1bps
 =RR     10-year   R>                        0      ps  
                   FORWARD    RATE       AGREE                   
                                         MENT           
                              3x6        6x9    9x12    3M
                                                        interbank
         Czech             <       2.25   2.24    2.19       2.17
         Rep       PRIBOR=>                             
         Hungary           <       0.25   0.32    0.43       0.16
                   BUBOR=>                              
         Poland            <       1.74   1.74    1.75       1.71
                   WIBOR=>                              
         Note:     are for ask prices                            
         FRA                                            
         quotes                                         
         *********************************************           
         *****************                              
 
    
 (Reporting by Luiza Ilie in Bucharest, Jason Hovet in Prague
and Alan Charlish in Warsaw; Editing by Jan Harvey)
  
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below