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Krisztina Than

CEE MARKETS-Forint leads gains, helped by dollar's weakening

24 May 2019

By Krisztina Than BUDAPEST, May 24 Hungary's forint outperformed central European currencies on Friday, rising 0.3%, helped by the dollar's weakening, which improved risk appetite in emerging markets. The dollar slipped after weak U.S. manufacturing activity data sparked worries that the trade conflict with China may hurt its economy and affect the currency's safe-haven status. "There was this bad U.S. figure ... and now everybody is trying to assess how the trade war would impact the dollar, plus the Fed has been rather dovish, so that points to dollar weakening," a currency dealer said in Budapest. "This improved risk sentiment in emerging markets and could be behind the forint's gains today." The Hungarian forint, which has been testing new 2-year lows versus the euro in recent weeks, was trading 0.3% firmer at 326.10 per euro at 0838 GMT, regaining some ground ahead of the central bank's rate meeting on Tuesday. However, uncertainty still prevailed in markets over politics in Britain and the prospect of a new Brexit referendum as well as the ongoing European parliament elections. Analysts at brokerage Equilor said the forint has bounced back from 327.50 on Thursday so there was a chance for some positive correction. However, they said the forint could only gain substantially if it manages to firm past 325 to the euro. The Czech crown was stuck at a fresh 3-month low. "It looks like there were some stop losses (pushing the crown even weaker)," a trader said. "We are seeing now some bigger demand customers (for hedging at these levels), but I had anticipated more interest." Market players expect the National Bank of Hungary to leave interest rates on hold next Tuesday, and expect more guidance from the dovish bank at the June meeting, when the central bank will discuss its next inflation report. The NBH will keep its base interest rate on hold for the rest of 2019, preferring to tackle rising inflation by letting interbank rates rise, a Reuters poll found. Main stock indexes in the region were also in positive territory on Friday, with Warsaw trading 0.7% higher and Budapest also rising 0.8% by 0855 GMT. PKN Orlen rose 1% after Morgan Stanley boosted its rating on Poland's biggest oil refiner to "overweight" from "equal-weight" CEE MARKETS SNAPSHOT AT 1038 CET CURRENCIES Latest Previous Daily Change bid close change in 2019 Czech 25.8460 25.8280 -0.07% -0.54% crown Hungary 326.1000 327.0000 +0.28 -1.54% forint % Polish 4.2975 4.3035 +0.14 -0.18% zloty % Romanian 4.7585 4.7596 +0.02 -2.20% leu % Croatian 7.4270 7.4275 +0.01 -0.23% kuna % Serbian 117.9600 117.9500 -0.01% +0.29% dinar Note: calculated from 1800 daily CET change Latest Previous Daily Change close change in 2019 Prague 1044.90 1038.0900 +0.66 +5.91% % Budapest 40327.32 40010.72 +0.79 +3.04% % Warsaw 2188.46 2173.09 +0.71 -3.87% % Buchares 8120.10 8109.89 +0.13 +9.97% t % Ljubljan 875.31 872.01 +0.38 +8.83% a % Zagreb 1873.26 1863.84 +0.51 +7.12% % Belgrade 732.77 734.61 -0.25% -3.80% Sofia 573.51 573.51 +0.00 -3.52% % BONDS Yield Yield Spread Daily (bid) change vs change Bund in Czech spread Republic 2-year 1.6190 -0.0150 +226b -1bps ps 5-year 1.6900 0.0350 +221b +3bps ps 1.7840 -0.0350 +190b -4bps 10-year ps Poland 2-year 1.6730 0.0030 +231b +1bps ps 5-year 2.1860 -0.0070 +271b -1bps ps 2.8220 -0.0020 +294b -1bps 10-year ps FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M interba nk Czech <PR 2.20 2.16 2.11 2.20 Rep IBOR=> Hungary <BU 0.37 0.56 0.73 0.20 BOR=> Poland <WI 1.73 1.74 1.75 1.72 BOR=> Note: are for ask prices FRA quotes (Additional reporting by Jason Hovet, Editing by William Maclean)

Hungary protests spark opposition coalition - but will it last?

19 Dec 2018

BUDAPEST Week-long protests in Budapest have forged fragmented opposition parties into a rare coalition against Viktor Orban, drawing young Hungarians into the streets to demonstrate against what they see as his increasingly authoritarian rule.

UPDATE 2-Hungary keeps rates unchanged, shifts to more hawkish language

18 Dec 2018

BUDAPEST, Dec 18 Hungary's central bank left interest rates unchanged at record lows on Tuesday but shifted to a more hawkish tone in its comments, flagging a rise in core inflation in 2019 and dropping references to loose monetary conditions.

Hungarians protest at state TV to demand independent public media, courts

18 Dec 2018

BUDAPEST About 2,000 Hungarians protested at the state television building to demand independent public media and courts on Monday in the latest gathering uniting a fragmented opposition in action against right-wing Prime Minister Viktor Orban.

'All I want for Christmas is democracy,' say Hungary protesters

17 Dec 2018

BUDAPEST Thousands of Hungarians thronged the streets of Budapest on Sunday in the fourth and largest protest in a week against what they see as the increasingly authoritarian rule of right-wing nationalist Viktor Orban.

CEE MARKETS-Czech crown holds gains, fuelled by rate hike hopes

14 Dec 2018

By Krisztina Than and Jason Hovet BUDAPEST/PRAGUE, Dec 14 The Czech crown held onto earlier gains, bucking weakness in eastern Europe on Friday, after a central bank board member earlier this week flagged the possibility of raising interest rates again soon. On Friday at 0754 GMT, the crown was flat at 25.80 versus the euro, weaker than its 200-day moving average of 25.7 to the euro. Both the Hungarian forint and the Polish zloty eased slightly. "The crown is benefiting from optimistic and hawkish central bank comments that indicate the December policy meeting does not have to be only in the direction of an earlier indicated pause (in rate tightening)," CSOB said in a note. Even if the bank keeps rates on hold next week, the analysts said, the expectations for faster tightening were likely to prevail, especially if the crown remains weaker than the central bank's forecasts early next year. Czech central bank board member Vojtech Benda told Reuters on Wednesday that a weaker-than-expected crown was a reason to debate another interest rate increase next week. The bank's November forecast saw the crown at an average 25.7 to the euro in the final quarter. It has averaged near 25.85 in the past two months. The Czech central bank, which defends a lower inflation target at 2 percent, has been raising rates while its Hungarian and Polish peers have so left rates unchanged. Hungary's central bank will hold its last rate meeting this year on Dec. 18, where no change in rates is expected. It might send some signals about tightening market liquidity next year. Central European stocks dropped on Friday in line with the rest of Europe. Shares fell after weak Chinese data renewed worries about the health of the world's second-largest economy and potential damage from Washington's trade war with Beijing. "We expect a moderate decline on the Budapest Stock Exchange today after the disappointing Asian data," brokerage Equilor said. At 0911 GMT the Budapest bourse's main index was down 0.4 percent, while the main Warsaw index traded one percent lower. CEE SNAPSHOT AT MARKETS 0954 CET CURRENCI ES Latest Previous Daily Change bid close change in 2018 Czech 25.8020 25.8100 +0.03% -1.01% crown Hungary 323.9000 323.3600 -0.17% -4.01% forint Polish 4.2996 4.2963 -0.08% -2.87% zloty Romanian 4.6525 4.6525 +0.00% +0.58% leu Croatian 7.3880 7.3925 +0.06% +0.57% kuna Serbian 118.2700 118.2800 +0.01% +0.19% dinar Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2018 Prague 1025.78 1029.170 -0.33% -4.86% 0 Budapest 39862.46 40041.71 -0.45% +1.23% Warsaw 2284.92 2310.66 -1.11% -7.16% Bucharest 8585.70 8588.43 -0.03% +10.73% Ljubljana 799.30 797.47 +0.23% -0.88% Zagreb 1737.81 1733.02 +0.28% -5.70% Belgrade <.BELEX15 747.22 750.48 -0.43% -1.66% > Sofia 590.41 590.47 -0.01% -12.85% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=RR 1.6980 0.1000 +229bps +11bps > 5-year <CZ5YT=RR 1.8270 0.0530 +210bps +8bps > 10-year <CZ10YT=R 1.9690 0.0000 +171bps +3bps R> Poland 2-year <PL2YT=RR 1.4330 -0.0090 +203bps +0bps > 5-year <PL5YT=RR 2.3980 0.0050 +267bps +3bps > 10-year <PL10YT=R 2.9640 0.0080 +271bps +4bps R> FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interban k Czech Rep < 2.19 2.31 2.37 2.01 PRIBOR=> Hungary < 0.29 0.50 0.76 0.13 BUBOR=> Poland < 1.75 1.77 1.81 1.72 WIBOR=> Note: FRA are for ask prices quotes ************************************************** ************ (Additional reporting by Jason Hovet, editing by Larry King)

CEE MARKETS-Currencies flat, Czech rates up on hawkish central bank comments

13 Dec 2018

By Krisztina Than and Jason Hovet BUDAPEST/PRAGUE, Dec 13 Central European currencies were broadly flat on Thursday as players awaited an ECB rate decision and economic forecasts and also U.S. Federal Bank rates moves, while Czech rates markets moved up after a central bank board member flagged the possibility of another hike next week. Vojtech Benda told Reuters on Wednesday that a weaker-than-expected crown was a reason to debate another interest rate increase next week. The Czech central bank, which defends a lower inflation target at 2 percent, has been firmly in hiking mode, and is seen tightening policy further, particularly if the crown currency stays weaker than its forecasts. "With the curve having not more than one hike priced in till the end of next year after the recent massive drops, the speech seems to have caught (the rates) market by surprise," Komercni Banka trader Dalimil Vyskovsky said in a note. On Thursday morning the Czech crown was flat at 25.84 versus the euro, remaining weaker than its 200-day moving average of 25.7 to the euro. Unlike the Czech central bank, the Hungarian and the Polish central banks have been sticking to their dovish policies thanks to a relatively benign inflation backdrop. But this is likely to change next year. A Reuters poll of analysts showed on Thursday that Central European long-term government bond yields will increase over the coming year due to a likely pick-up in inflation and yield rises in the United States and the euro zone. Hungary's central bank will hold its last rate meeting this year on Dec. 18, where it is expected to keep its interest rates on hold at record lows again, but investors said it might send some signals about a tightening of market liquidity for next year. "Hungary and Poland will likely be more sensitive to upside inflation readings, as market pricing is still constrained by a relatively mild CPI backdrop to date and dovish central banks," Bank of America Merrill Lynch said in a note for 2019. The region's stock markets were slightly in positive territory, with global sentiment setting the trend. "We expect sideways trading (on the Budapest bourse)," brokerage Equilor said in a note. It said the forint could be influenced by the European Central Bank's meeting later on Thursday. The ECB is all but certain to formally end its lavish bond purchase scheme on Thursday but will take an increasingly dim view on growth, raising the odds that its next step in removing stimulus will be delayed. The ECB announces its rate decision at 1245 GMT and Draghi will hold a news conference at 1330 GMT. Economists polled by Reuters unanimously expect unchanged rates CEE SNAPSHO AT MARKETS T 1028 CET CURRENC IES Latest Previou Daily Change s bid close change in 2018 Czech <EURCZK 25.8420 25.8400 -0.01% -1.16% crown => Hungary <EURHUF 322.900 323.080 +0.06% -3.71% forint => 0 0 Polish <EURPLN 4.2940 4.2936 -0.01% -2.74% zloty => Romanian <EURRON 4.6495 4.6559 +0.14% +0.65% leu => Croatian <EURHRK 7.3940 7.3885 -0.07% +0.49% kuna => Serbian <EURRSD 118.210 118.380 +0.14% +0.25% dinar => 0 0 Note: calculated from 1800 daily CET change Latest Previou Daily Change s close change in 2018 Prague 1035.51 1030.74 +0.46% -3.96% 00 Budapest 39908.3 39887.2 +0.05% +1.35% 1 2 Warsaw <.WIG20 2276.32 2275.15 +0.05% -7.51% > Buchares 8558.76 8567.83 -0.11% +10.38 t % Ljubljan <.SBITO 799.89 795.80 +0.51% -0.80% a P> Zagreb <.CRBEX 1732.99 1716.49 +0.96% -5.96% > Belgrade <.BELEX 749.33 745.65 +0.49% -1.38% 15> Sofia <.SOFIX 593.51 593.06 +0.08% -12.39% > BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT= 1.6380 0.0360 +220bp +2bps RR> s 5-year <CZ5YT= 1.7950 0.0270 +202bp +1bps RR> s <CZ10YT 2.0460 0.0230 +176bp +1bps 10-year =RR> s Poland 2-year <PL2YT= 1.4800 0.0090 +204bp -1bps RR> s 5-year <PL5YT= 2.4150 0.0200 +264bp +0bps RR> s <PL10YT 2.9730 0.0240 +269bp +1bps 10-year =RR> s FORWARD RATE AGREEME NT 3x6 6x9 9x12 3M interba nk Czech <CZKFRA 2.19 2.32 2.39 2.01 Rep ><PRIBO R=> Hungary <HUFFRA 0.31 0.54 0.84 0.13 ><BUBOR => Poland <PLNFRA 1.75 1.77 1.80 1.72 ><WIBOR => Note: are for ask FRA prices quotes ******************************************** ****************** (Reporting by Krisztina Than Editing by)

Hungary to set up courts overseen directly by government

12 Dec 2018

BUDAPEST Hungary passed a law on Wednesday to set up courts overseen directly by the justice minister, a move critics said would allow political interference in judicial matters and further undermine the rule of law.

Soros-founded school says forced out of Hungary on 'dark day for Europe'

04 Dec 2018

BUDAPEST The Central European University, founded by billionaire George Soros, said on Monday it had been forced out of Hungary in "an arbitrary eviction" that violated academic freedom, and it confirmed plans to open a new campus in Austria.

Gateway for east Europe to the West, Soros-founded school leaves Hungary

23 Nov 2018

BUDAPEST For nearly three decades Central European University has been a gateway to the West for thousands of students from ex-communist eastern Europe, offering U.S.-accredited degree programmes in an academic climate that celebrates free thought and open debate.

World News

Europeans vote, with EU future in balance

Europeans vote on Sunday in an election expected to further dent traditional pro-EU parties and bolster the nationalist fringe in the European Parliament, putting a potential brake on collective action in economic and foreign policy.