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Krisztina Than

Hungary central bank expected to keep rates on hold, shrug off weak forint: Reuters poll

19 Sep 2019

BUDAPEST The National Bank of Hungary is expected to keep interest rates unchanged next Tuesday and stick to its dovish stance, ignoring the weak forint which hit a record low versus the euro earlier this week, a Reuters poll of analysts showed.

CEE MARKETS-Currencies, stocks weaken on geopolitical jitters

17 Sep 2019

By Krisztina Than BUDAPEST, Sept 17 Central European currencies and stocks fell on Tuesday amid geopolitical concerns raised by attacks on Saudi oil facilities, with Hungary's forint reaching a record 333.53 against the euro. By 0917 GMT, the forint, which has underperformed its peers in the region this year by easing 3.7%, was down about 0.4%. Other regional currencies were trading 0.1 to 0.2% lower. "This weakening today is probably due to the renewed tensions between the United States and Iran, which has soured investor sentiment," a dealer in Budapest said. The forint was in a weakening trend, she said, and could test its all-time low soon, since the Hungarian central bank was not expected to change its dovish stance at next week's meeting. "The historical low of 333.45 is the only significant resistance for the forint ... should the currency ease past this level, that could bring about further sudden losses," Erste analysts said in a note. On Monday, Gergely Gulyas, Prime Minister Viktor Orban's chief of staff, told Reuters the government had no exchange rate target, but the current rate "posed no threat to the success of Hungarian economic policy." The central bank has so far not commented on the forint's easing, also saying it had no exchange rate target. The bank holds its next policy meeting on Sept. 24 when it will publish its fresh inflation forecasts. Investors will watch the bank's comments on whether it expects the weaker forint to boost inflation in the longer run. Unlike with the European Central Bank, which cut rates and began a new stimulus programme last week, monetary policy-makers in central Europe remain noncommittal. Investors are waiting for a Federal Reserve policy meeting on Wednesday, which is a widely expected cut to interest rates. Most analysts doubt the region's central banks will follow global central banks' footsteps anytime soon. Czech central bankers Marek Mora and Oldrich Dedek both told Reuters this week rate they expect rates to remain stable, since the Czech economy remains resilient in the face of slowdowns abroad. The Czech central bank's monetary department chief, Petr Kral, said in a blog post on Tuesday that the bank could raise interest rates once more in the near future if its baseline economic forecast scenario is met. CEE SNAPSHO AT MARKETS T 1044 CET CURRENC IES Latest Previou Daily Change s bid close change in 2019 EURCZK Czech <EURCZK 25.8880 25.8490 -0.15% -0.70% = crown => EURHUF Hungary <EURHUF 333.240 332.100 -0.34% -3.65% = forint => 0 0 EURPLN Polish <EURPLN 4.3370 4.3280 -0.21% -1.09% = zloty => EURRON Romanian <EURRON 4.7360 4.7341 -0.04% -1.73% = leu => EURHRK Croatian <EURHRK 7.3930 7.3943 +0.02% +0.23% = kuna => EURRSD Serbian <EURRSD 117.490 117.600 +0.09% +0.69% = dinar => 0 0 Note: calculated from 1800 daily CET change Latest Previou Daily Change s close change in 2019 .PX Prague 1058.06 1060.83 -0.26% +7.25% 00 .BUX Budapest 40575.8 40819.5 -0.60% +3.67% 6 6 .WIG20 Warsaw <.WIG20 2201.23 2217.84 -0.75% -3.31% > .BETI Buchares 9281.32 9289.26 -0.09% +25.70 t % .SBITO Ljubljan <.SBITO 854.97 858.87 -0.45% +6.31% P a P> .CRBEX Zagreb <.CRBEX 1892.96 1895.07 -0.11% +8.24% > .BELEX Belgrade <.BELEX 762.16 757.47 +0.62% +0.06% 15 15> .SOFIX Sofia <.SOFIX 579.70 580.02 -0.06% -2.48% > BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic CZ2YT= 2-year <CZ2YT= 1.3350 -0.0470 +204bp -5bps RR RR> s CZ5YT= 5-year <CZ5YT= 1.1040 -0.0740 +185bp -7bps RR RR> s CZ10YT <CZ10YT 1.4040 -0.0220 +190bp -1bps =RR 10-year =RR> s Poland PL2YT= 2-year <PL2YT= 1.5220 -0.0140 +223bp -2bps RR RR> s PL5YT= 5-year <PL5YT= 1.8890 0.0080 +263bp +2bps RR RR> s PL10YT <PL10YT 2.1350 0.0090 +263bp +3bps =RR 10-year =RR> s FORWARD RATE AGREEME NT 3x6 6x9 9x12 3M interba nk Czech <CZKFRA 2.16 2.09 1.98 2.14 Rep ><PRIBO R=> Hungary <HUFFRA 0.27 0.33 0.32 0.21 ><BUBOR => Poland <PLNFRA 1.73 1.73 1.72 1.72 ><WIBOR => Note: are for ask FRA prices quotes (Reporting by Robert Muller in Prague, Krisztina Than in Budapest; editing by Larry King)

Interview: Hungary sees no solitary veto of new Brexit delay -PM aide

16 Sep 2019

BUDAPEST Hungary on its own will not veto a new delay to Britain's departure from the European Union, a top minister said on Monday, adding that a disorderly Brexit would dent Hungary's strong economic growth.

Hungary sees no solitary veto of new Brexit delay: PM aide

16 Sep 2019

BUDAPEST Hungary on its own will not veto a new delay to Britain's departure from the European Union, a top minister said on Monday, adding that a disorderly Brexit would dent Hungary's strong economic growth.

Hungary central bank chief criticizes finance minister for downbeat comments

09 Sep 2019

BUDAPEST Hungarian Central Bank Governor Gyorgy Matolcsy criticized the finance minister on Monday for recent comments that suggested the economy's "golden age" was nearing an end due to an expected slowdown.

CEE MARKETS-Currencies tread water as investors await ECB, local inflation data

09 Sep 2019

By Krisztina Than BUDAPEST, Sept 9 Central European currencies were steady on Monday while stocks mostly rose as investors shifted focus to the European Central Bank's meeting later this week, when it is expected to cut interest rates. Expectations of a new wave of stimulus by the ECB have supported assets in Central Europe amid lingering fears over risks stemming from global trade tensions, a slowdown in Germany and a potential no-deal British exit from the European Union. In a mild positive sign after a run of weak data, German exports rose in July, data showed on Monday, marking an unexpectedly solid start to the third quarter for Europe's largest economy which has very close trade links with eastern Europe. Investors were awaiting the ECB's assessment of recession risk and the inflation outlook on Thursday. "If the ECB turns out not as dovish as expected, a temporary market disappointment will possibly drive core and Polish bond yields higher," Santander Bank said in a note. Czech bond yields ticked up slightly on Monday. Besides the ECB, investors will also be watching Czech and Hungarian inflation data on Tuesday. Czech unemployment was unchanged at 2.7% in August, confirming a tight labour market, which is expected to keep the Czech central bank in a neutral gear even as the ECB and U.S. Federal Reserve go loose on policy, analysts said. "We don't see the CNB hiking rates if FX doesn't appreciate enough compared to its forecast, while an announcement from the ECB that it intends to renew QE can create further incentives for the CNB to cut rates in 2020," Morgan Stanley said in a note. Analysts expect Czech headline inflation to stay at the upper end of the central bank's tolerance band around its 2% target. The median forecast in a Reuters poll sees the rate easing a touch to 2.8% year on year in August from 2.9% in July. Economies in Central Europe have been growing faster than the euro zone, driven largely by strong domestic demand, while labour markets across the region remain tight, struggling with labour shortages. However, low inflation in the euro zone has helped keep a lid on inflation in Central Europe. Hungarian core inflation, which reached the top of the central bank's 2% to 4% target range in May, had retreated to 3.7% by July. August inflation data due on Tuesday is expected to show a decline in headline inflation to 3.2% from 3.3% in July. This will confirm the bank's dovish stance. "We continue to expect the NBH to use the liquidity channel as its main tool for conducting monetary policy this and next year with no change in the policy rate," Morgan Stanley said. The region's main currencies hovered in recent trading ranges, with the zloty 0.2% firmer against the euro, the Czech crown down 0.1% and the Hungarian forint flat, at 329.96 to the euro, off record lows of 331.85 hit at the end of last month. CEE SNAPSHO AT MARKETS T 1023 CET CURRENC IES Latest Previou Daily Change s bid close change in 2019 EURCZK Czech <EURCZK 25.8640 25.8350 -0.11% -0.61% = crown => EURHUF Hungary <EURHUF 330.000 330.130 +0.04% -2.70% = forint => 0 0 EURPLN Polish <EURPLN 4.3312 4.3404 +0.21% -0.96% = zloty => EURRON Romanian <EURRON 4.7310 4.7307 -0.01% -1.63% = leu => EURHRK Croatian <EURHRK 7.3975 7.4020 +0.06% +0.17% = kuna => EURRSD Serbian <EURRSD 117.500 117.600 +0.09% +0.68% = dinar => 0 0 Note: calculated from 1800 daily CET change Latest Previou Daily Change s close change in 2019 .PX Prague 1035.63 1032.06 +0.35% +4.97% 00 .BUX Budapest 40316.5 40312.4 +0.01% +3.01% 5 6 .WIG20 Warsaw <.WIG20 2157.53 2122.60 +1.65% -5.23% > .BETI Buchares 9259.27 9245.30 +0.15% +25.40 t % .SBITO Ljubljan <.SBITO 847.74 848.49 -0.09% +5.41% P a P> .CRBEX Zagreb <.CRBEX 1864.32 1864.80 -0.03% +6.61% > .BELEX Belgrade <.BELEX 748.37 745.80 +0.34% -1.75% 15 15> .SOFIX Sofia <.SOFIX 574.41 574.17 +0.04% -3.37% > BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic CZ2YT= 2-year <CZ2YT= 1.2270 -0.0080 +206bp -2bps RR RR> s CZ5YT= 5-year <CZ5YT= 0.9620 0.0590 +184bp +4bps RR RR> s CZ10YT <CZ10YT 1.2040 0.0140 +181bp -2bps =RR 10-year =RR> s Poland PL2YT= 2-year <PL2YT= 1.6050 0.0250 +244bp +1bps RR RR> s PL5YT= 5-year <PL5YT= 1.8590 0.0460 +274bp +3bps RR RR> s PL10YT <PL10YT 2.0840 0.0720 +269bp +4bps =RR 10-year =RR> s FORWARD RATE AGREEME NT 3x6 6x9 9x12 3M interba nk Czech <CZKFRA 2.10 1.97 1.80 2.14 Rep ><PRIBO R=> Hungary <HUFFRA 0.30 0.33 0.36 0.24 ><BUBOR => Poland <PLNFRA 1.73 1.72 1.71 1.72 ><WIBOR => Note: are for ask FRA prices quotes (Reporting by Jason Hovet in Prague and Krisztina Than in Budapest; Editing by Susan Fenton)

4iG steps up as Hungary's corporate bond scheme gathers speed

06 Sep 2019

BUDAPEST, Sept 6 Hungarian IT company 4iG plans a bond issue to help finance its expansion, as part of the central bank's new corporate bond-buying programme, the company's chairman and chief executive said on Friday.

CEE MARKETS-Forint leads currencies higher in relief rally as no-deal Brexit fears ease

04 Sep 2019

By Krisztina Than BUDAPEST, Sept 4 Central European currencies and shares rebounded on Wednesday in line with a broad European relief rally on markets as political developments in Italy and Britain have eased investors' fears. The Hungarian forint jumped half a percent versus the euro, firming past 330 and away from a record low of 331.85 hit last week, and leading the region's currencies higher. British lawmakers have seized control of the parliamentary timetable to try to block a no-deal Brexit, giving some hope to investors fretting about the consequences of Britain leaving the European Union without any agreement. "Yesterday's parliamentary decision reduces the risk of Britain exiting without a deal, which, if confirmed in today's political decisions, may support market sentiment," Bank Millennium said in a note. "The EUR/PLN exchange rate fell to 4.35, reaching an important support, the breaking of which may give space for further strengthening of the zloty," it added. By 0822 GMT the zloty was trading 0.15% higher at 4.3403 versus the euro. The region's fast-growing economies have outpaced the euro zone and August PMI manufacturing surveys on Monday which showed a pickup in activity had boosted local markets. But economic growth is expected to slow this year and next over uncertainties ranging from global trade tensions to a potential disorderly British exit from the EU, which could also hurt Central Europe by damaging trade relations. "This August was the most painful month for emerging market investors for some time," analysts at Raiffeisen said in a note. "That being said, central bank actions in September could help to stabilise the situation. For CEE, the ECB plays an important role in this respect." Interest rate cuts and a potential relaunch of quantitative easing by the ECB could support Central European currencies, Raiffeisen added. The ECB is expected to cut its deposit rate next week and announce a restart of its asset purchase programme, but more than 80% of economists polled by Reuters were sceptical about the bank's ability to influence inflation over the medium term. CEE SNAPSHO AT MARKETS T 1022 CET CURRENC IES Latest Previou Daily Change s bid close change in 2019 EURCZK= Czech <EURCZK= 25.8050 25.8330 +0.11% -0.38% crown > EURHUF= Hungary <EURHUF= 328.600 330.200 +0.49% -2.29% forint > 0 0 EURPLN= Polish <EURPLN= 4.3403 4.3470 +0.15% -1.17% zloty > EURRON= Romanian <EURRON= 4.7295 4.7280 -0.03% -1.60% leu > EURHRK= Croatian <EURHRK= 7.4065 7.4045 -0.03% +0.05% kuna > EURRSD= Serbian <EURRSD= 117.410 117.600 +0.16% +0.76% dinar > 0 0 Note: calculated from 1800 daily CET change Latest Previou Daily Change s close change in 2019 .PX Prague 1030.23 1030.39 -0.02% +4.43% 00 .BUX Budapest 39639.0 39405.1 +0.59% +1.28% 7 9 .WIG20 Warsaw 2130.78 2107.16 +1.12% -6.41% .BETI Buchares 9250.58 9245.71 +0.05% +25.28 t % .SBITOP Ljubljan <.SBITOP 852.80 852.06 +0.09% +6.04% a > .CRBEX Zagreb 1867.73 1868.16 -0.02% +6.80% .BELEX1 Belgrade <.BELEX1 747.11 743.15 +0.53% -1.91% 5 5> .SOFIX Sofia 569.84 571.80 -0.34% -4.14% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic CZ2YT=R 2-year <CZ2YT=R 1.1490 0.0200 +205bp +3bps R R> s CZ5YT=R 5-year <CZ5YT=R 0.8480 0.0070 +178bp +0bps R R> s CZ10YT= <CZ10YT= 1.0600 0.0240 +174bp -1bps RR 10-year RR> s Poland PL2YT=R 2-year <PL2YT=R 1.5640 0.0110 +247bp +2bps R R> s PL5YT=R 5-year <PL5YT=R 1.7110 0.0290 +264bp +2bps R R> s PL10YT= <PL10YT= 1.8570 0.0380 +254bp +1bps RR 10-year RR> s FORWARD RATE AGREEME NT 3x6 6x9 9x12 3M interba nk Czech 2.08 1.91 1.72 2.14 Rep <PRIBOR= > Hungary 0.31 0.36 0.41 0.26 Poland 1.72 1.69 1.63 1.72 Note: are for ask FRA prices quotes (Reporting by Jason Hovet in Prague, Krisztina Than in Budapest and Alan Charlish in Warsaw; Editing by Peter Graff)

CEE MARKETS-Currencies firm slightly, PMI data show some improvement

02 Sep 2019

By Krisztina Than BUDAPEST, Sept 2 Central European currencies firmed on Monday in a positive correction after a week of losses, aided by fresh PMI data showing a slight improvement in economic activity in August across the region after a dip in July. However, worries over the global economy, U.S.-China trade tensions and the threat of a disorderly exit by Britain from the European Union continue to weigh on investor sentiment, and could also dent the region's economic prospects, analysts said. Growth is expected to slow in the remainder of the year and next year in Central Europe, which has produced very strong expansion in the past years, well outpacing the euro zone. "The improvement in PMI only means that the activity was shrinking at a slower pace...This is not a signal of an acceleration in the economy," said Piotr Bielski, the head of economic analysis department at Santander Bank Polska. "This doesn’t change (the fact) that rising global trade war tensions and a slowdown in other European countries will keep on affecting Polish companies." Hungary's seasonally adjusted Purchasing Managers' Index rose to 52.6 in August from a revised 51.2 in July, while the Polish IHS Markit purchasing managers' index for manufacturing rose to 48.8 from 47.4 in July, remaining below the 50.0 level that separates growth from contraction. The Czech headline PMI reading improved to 44.9 in August from a 10-year low of 43.1 in July, data compiled by IHS Markit showed. The Hungarian forint, which hit a record-low of 331.85 last Thursday, edged up 0.14% to 330.92 per euro, while the Polish zloty was 0.27% stronger on Monday from Friday's levels. David Nemeth, an analyst at K&H Bank in Budapest, said growth in the region was expected to slow in the rest of 2019 and next year gradually, but "not tragically." This was a base case scenario. However, if there is a hard Brexit, or the global trade war worsens significantly, that could shave more off Central Europe's GDP growth, he said. "Today's PMI data I would say is neutral," Nemeth said. "The Hungarian data is very much influenced by the fact that there are big construction projects underway, and EU-funded and other investment projects, which bring some impetus." The Czech crown was also marginally firmer, rising 0.2% versus the euro in early trade. "Signals from domestic industry give the central bank an argument for maintaining its wait-and-see attitude with stable interest rates for the remainder of this year," Radomir Jac, CEE chief economist at Generali Investments said. Data on Friday showed Poland's economy expanded by 4.5% year-on-year last quarter and the Czech Republic's by 2.7%, both faster than flash estimates, giving comfort to a region where domestic demand is a key growth driver as the euro zone slows and key trade partner Germany flirts with recession. Hungary's economy expanded by 4.9% in the second quarter year on year. CEE SNAP AT MARKETS SHOT 1011 CET CURR ENCI ES Late Previ Daily Change st ous bid close change in 2019 EURCZK= Czech 25.9 25.96 +0.18% -0.83% crown 220 90 EURHUF= Hungary 330. 331.3 +0.14% -2.97% forint 9200 700 EURPLN= Polish 4.36 4.376 +0.27% -1.73% zloty 49 5 EURRON= Romanian 4.72 4.726 +0.00% -1.52% leu 60 0 EURHRK= Croatian 7.40 7.405 -0.00% +0.05% kuna 60 7 EURRSD= Serbian 117. 117.7 +0.14% +0.64% dinar 5500 200 Note: calculated from 1800 daily CET change Late Previ Daily Change st ous close change in 2019 .PX Prague 1040 1037. +0.27% +5.43% .11 2700 .BUX Budapest 3978 39794 -0.02% +1.66% 7.59 .12 .WIG20 Warsaw 2134 2135. -0.04% -6.24% .46 25 .BETI Bucharest 9234 9235. -0.02% +25.06 .21 72 % .SBITOP Ljubljana 852. 854.8 -0.27% +6.00% 51 2 .CRBEX Zagreb 1865 1873. -0.41% +6.68% .63 36 .BELEX15 Belgrade <.BELEX15 745. 745.0 +0.12% -2.06% > 98 5 .SOFIX Sofia 569. 567.4 +0.31% -4.24% 23 5 BOND S Yiel Yield Spread Daily d (bid chang vs Bund change ) e in Czech spread Republic CZ2YT=RR 2-year <CZ2YT=RR 1.13 0.025 +206bp +3bps > 20 0 s CZ5YT=RR 5-year <CZ5YT=RR 0.85 0.019 +180bp +2bps > 70 0 s CZ10YT=RR 10-year <CZ10YT=R 1.05 -0.00 +176bp -2bps R> 80 80 s Poland PL2YT=RR 2-year <PL2YT=RR 1.56 0.001 +249bp +0bps > 60 0 s PL5YT=RR 5-year <PL5YT=RR 1.70 0.021 +265bp +2bps > 30 0 s PL10YT=RR 10-year <PL10YT=R 1.86 0.035 +257bp +3bps R> 70 0 s FORWARD RATE AGREE MENT 3x6 6x9 9x12 3M interba nk Czech Rep < 2.08 1.90 1.73 2.14 PRIBOR=> Hungary < 0.31 0.36 0.40 0.26 BUBOR=> Poland < 1.72 1.67 1.60 1.72 WIBOR=> Note: FRA are for ask quotes prices (Reporting by Krisztina Than in Budapest, Jason Hovet and Robert Muller in Prague and Alicja Ptak in Warsaw; Editing by Toby Chopra)

Hungary central bank holds rates, sees downward inflation risks

27 Aug 2019

BUDAPEST The National Bank of Hungary (NBH) left interest rates unchanged on Tuesday, as expected, amid slowing domestic inflation, a worsening euro zone economic outlook and global monetary easing.

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