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Radu-Sorin Marinas

CEE MARKETS-Forint leads CEE losses; market eyes no Hungarian rate surprise

19 Oct 2020

By Anita Komuves and Radu-Sorin Marinas BUCHAREST/BUDAPEST, Oct 19 Hungary's forint led losses among Central European currencies on Monday, extending last week's falls, with investors largely expecting the central bank to keep rates steady during its Tuesday meeting. By 0920 GMT, the forint eased 0.2% to trade at 364.91 after having fallen to as low as 365 to the euro earlier in the session. Over the past week, the region witnessed a spike in COVID-19 infections, passing milestones of deaths and new cases nearly every day, which kept investors wary. "We expect a wait-and-see approach in the forint market today ahead of tomorrow's central bank's rate meeting," brokerage Equilor said in a note. The bank is likely to leave its base rate unchanged at 0.6% on Tuesday after weaker-than-expected September consumer prices data eased some concerns about inflation, a Reuters poll of economists showed. "The significant slowdown of inflation in September eased the pressure on the central bank," CIB Bank wrote in a note. "Thus we do not expect a change in the base rate for a while, the bank could manage the forint's exchange rate using the one-week deposit tender if need be." Of the eight economists who gave a forecast for the one-week deposit rate at the end of next month in a Reuters poll, six said it would stay at the current 0.75% level, with two analysts projecting another 15-basis-point increase over the coming weeks to 0.9%. Deputy Governor Barnabas Virag said the bank would use this as a "fast response" tool, if needed, adding that renewed risk aversion posed the biggest risk to the inflation outlook. Elsewhere, the Czech crown and the Polish zloty both edged 0.1% down to trade at 27.2850 and 4.5485, respectively. The Romanian leu was flat at 4.8765. Czech bond yields mostly ticked higher, continuing a correction trend as markets keep an eye on 2021 budget preparations, with the deficit expected to stay next year. "Czech yields continued to edge higher in a correction after yield declines in September. This is something that we had expected," Erste Group Bank said. CEE SNAPSHOT AT MARKETS 1120 CET CURRENCIE S Latest Previous Daily Change bid close change in 2020 Czech 27.2850 27.2600 -0.09% -6.79% crown Hungary 365.0000 364.0600 -0.26% -9.28% forint Polish 4.5485 4.5450 -0.08% -6.42% zloty Romanian 4.8775 4.8780 +0.01% -1.83% leu Croatian 7.5830 7.5825 -0.01% -1.81% kuna Serbian 117.5000 117.6000 +0.09% +0.06% dinar Note: calculated from 1800 daily CET change Latest Previous Daily Change close change in 2020 Prague 871.55 867.0800 +0.52% -21.88% Budapest 33339.58 33225.15 +0.34% -27.65% Warsaw 1663.97 1655.36 +0.52% -22.61% Bucharest 8902.32 8874.99 +0.31% -10.77% Ljubljana 831.67 839.52 -0.94% -10.17% Zagreb 1606.50 1605.28 +0.08% -20.37% Belgrade 691.00 692.01 -0.15% -13.81% Sofia 429.59 429.83 -0.06% -24.39% Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year 0.0940 0.0080 +087bp +1bps s 5-year 0.6250 0.0260 +143bp +3bps s 10-year <CZ10YT=RR 1.0440 0.0390 +167bp +4bps > s Poland 2-year 0.0150 -0.0010 +079bp +0bps s 5-year 0.4950 0.0060 +130bp +1bps s 10-year <PL10YT=RR 1.2960 0.0120 +192bp +1bps > s FORWARD 3x6 6x9 9x12 3M interban k Czech Rep <P 0.26 0.25 0.31 0.35 RIBOR=> Hungary <B 0.94 0.97 0.99 0.77 UBOR=> Poland <W 0.14 0.13 0.12 0.22 IBOR=> Note: FRA are for ask prices quotes **************************************************** ********** (Additional reporting by Jason Hovet in Prague; Editing by Ramakrishnan M.)

Romania's ruling centrists ahead in municipal vote

28 Sep 2020

BUCHAREST Romania's ruling centrist Liberals emerged as the leading party in a municipal ballot on Sunday, including in the capital, exit polls showed, bolstering their chances of forming the next government after a Dec. 6 parliamentary election.

CORRECTED-CEE MARKETS-CEE mixed, crown firms as market awaits easing halt for now

23 Sep 2020

(Corrects zloty, leu quotations in paragraph 8th) By Radu-Sorin Marinas BUCHAREST, Sept 23 Central European currencies were mixed early on Wednesday, with the Czech crown slightly firmer ahead of a central bank meeting in which the base rate is expected to be kept flat as the market eyes a temporary halt of monetary easing. A Reuters poll on Tuesday showed the Czech National Bank (CNB) was likely to keep its two-week repo rate at 0.25% after having cut it by 200 basis points so far this year, without reverting to easing again. Tighter policy, however, is not expected before the end of 2021. Analysts say interest rates have probably bottomed amid a resurgence in COVID-19 infections, raising fears the economy could again face restrictions. The Czech Republic recorded 2,394 new infections in its second-highest daily rise since the pandemic began, Health Ministry data showed on Wednesday. By 0820 GMT, the crown gained 0.2% to trade at trading at 26.970. "We do not expect an immediate reaction on the part of the CNB today, but we assume that the central bank will keep a close eye on the government's future measures and, if necessary, will take action ... as it had already done in the spring," said Commerzbank analysts. The crown eased by 3% since the start of the month, "thus coming in right at the bottom of the list of the Eastern European currencies. We expect the crown to remain under pressure for now," they added. The Polish zloty and the Romanian leu were little changed at 4.4883 and 4.8640 respectively. The Hungarian forint eased marginally 0.02% and was trading at 363.75, extending losses from the start of the week when it plunged to a five-month low in global risk-off mood. The currency temporarily firmed before falling back to Tuesday's levels after the central bank left rates unchanged and deputy governor Barnabas Virag said the bank is ready to use its tools if justified by the inflation outlook. "If the exchange rate of the forint weakens further, then, based on the comments of the central bank we expect a temporary rate hike at the one-week deposit tender, trying to stabilize the market," said David Nemeth, senior analyst at K&H Bank. CEE SNAPSHOT AT 1058 MARKETS CET CURRENCIE S Latest Previous Daily Change bid close change in 2020 Czech 26.9850 27.0230 +0.14% -5.76% crown Hungary 363.8000 363.6900 -0.03% -8.98% forint Polish 4.4877 4.4907 +0.07% -5.15% zloty Romanian 4.8640 4.8615 -0.05% -1.56% leu Croatian 7.5470 7.5465 -0.01% -1.35% kuna Serbian 117.5000 117.6000 +0.09% +0.06% dinar Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2020 Prague 869.12 868.0500 +0.12% -22.10% Budapest 32674.29 32296.74 +1.17% -29.10% Warsaw 1698.06 1693.09 +0.29% -21.02% Buchares 9016.05 9019.56 -0.04% -9.63% t Ljubljan 834.84 833.14 +0.20% -9.83% a Zagreb 1631.09 1619.00 +0.75% -19.15% Belgrade 686.26 692.62 -0.92% -14.40% Sofia 425.24 423.59 +0.39% -25.15% Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year 0.0950 -0.0300 +081bps -2bps 5-year 0.5380 -0.0260 +126bps -2bps <CZ10YT=RR 0.8730 -0.0140 +139bps +1bps 10-year > Poland 2-year 0.0800 -0.0050 +079bps +0bps 5-year 0.6360 -0.0300 +136bps -2bps <PL10YT=RR 1.3210 -0.0150 +184bps +1bps 10-year > FORWARD 3x6 6x9 9x12 3M interban k Czech <P 0.32 0.33 0.35 0.34 Rep RIBOR=> Hungary <B 0.81 0.90 0.97 0.63 UBOR=> Poland <W 0.20 0.18 0.18 0.22 IBOR=> Note: are for ask prices FRA quotes **************************************************** ********** (Additional reporting by Anita Komuves in Budapest and Jason Hovet in Prague; Editing by Ramakrishnan M.)

Romania receives Patriot missiles from U.S. to boost defences

17 Sep 2020

CAPU MIDIA FIRING RANGE, Romania The Romanian army received its first shipment of U.S. Raytheon Patriot surface-to-air missiles on Thursday, part of an effort to bolster its defences that has annoyed Russia.

Romania receives Patriot missiles from U.S. to boost defences

17 Sep 2020

CAPU MIDIA FIRING RANGE, Romania, Sept 17 The Romanian army received its first shipment of U.S. Raytheon Patriot surface-to-air missiles on Thursday, part of an effort to bolster its defences that has annoyed Russia.

Romania reopens schools under strict rules as coronavirus cases rise

14 Sep 2020

BUCHAREST Romania reopened schools for 2.8 million children on Monday after a six-month closure to fight the coronavirus outbreak, ordering pupils to wear face masks as infections rise.

Romania reopens schools under strict rules as coronavirus cases rise

14 Sep 2020

BUCHAREST, Sept 14 Romania reopened schools for 2.8 million children on Monday after a six-month closure to fight the coronavirus outbreak, ordering pupils to wear face masks as infections rise.

Romanian government survives no-confidence motion in boost for stability

31 Aug 2020

BUCHAREST Romania's centrist minority government survived a no-confidence motion in parliament on Monday, improving political stability as the country struggles to curb the coronavius epidemic that has pummelled its economy.

CEE MARKETS-Hungary forint extends losses as eyes on Powell speech

27 Aug 2020

By Radu-Sorin Marinas BUCHAREST, Aug 27 Hungary's forint extended losses on Thursday, trading around two-month lows and lagging its regional peers as investors looked ahead to a speech by the U.S. Fed chair expected to unveil a new strategy for price stability. Central Europe's worst-performing currency, having lost more than 7% of its value against the euro this year, the forint has been under recent pressure from dismal Hungarian GDP data, high inflation and loose monetary policy. This week, the National Bank of Hungary kept its base rate unchanged and announced an increase in weekly bond purchases. That had driven yields lower, traders noted. By 1000 GMT, the forint was down 0.1%, trading at 356.02 against the euro. Equilor analysts said earlier that if the 355.86 resistance level was breached, "the 360-level could be reached in one wave." . The Romanian leu was flat at 4.8425 per euro while the zloty was 0.3% up at 4.4064 and the Czech crown up 0.1% at 26.2727. Czech bond yields were a touch lower, with supply remaining limited after debt managers easily sold offered amounts at an auction on Wednesday. "The average price was somewhat higher than our expectations, especially for the 2040 bond, which confirms our view that the finance ministry is able to follow a very moderate pace of issuance due to a lower-than-expected budget deficit," said Komercni Banka trader Marek Lesko. CEE SNAPSHO AT MARKETS T 1150 CET CURRENC IES Latest Previous Daily Change bid close change in 2020 Czech 26.2890 26.3000 +0.04% -3.26% crown Hungary 356.200 355.8800 -0.09% -7.03% forint 0 Polish 4.4092 4.4222 +0.29% -3.47% zloty Romanian 4.8425 4.8405 -0.04% -1.12% leu Croatian 7.5250 7.5263 +0.02% -1.06% kuna Serbian 117.500 117.6000 +0.09% +0.06% dinar 0 Note: calculated from 1800 daily CET change Latest Previous Daily Change close change in 2020 Prague 908.56 908.5700 -0.00% -18.56% Budapest 35760.2 35915.81 -0.43% -22.40% 1 Warsaw 1839.81 1848.35 -0.46% -14.43% Buchares 8878.74 8835.85 +0.49% -11.01% t Ljubljan 854.14 854.48 -0.04% -7.75% a Zagreb 1613.43 1614.17 -0.05% -20.03% Belgrade <.BELEX15 690.92 691.97 -0.15% -13.82% > Sofia 432.05 437.61 -1.27% -23.95% Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=RR 0.1690 -0.0250 +084bp +0bps > s 5-year <CZ5YT=RR 0.6730 -0.0530 +134bp -1bps > s <CZ10YT=R 1.0310 -0.0180 +149bp +3bps 10-year R> s Poland 2-year <PL2YT=RR 0.1430 -0.0200 +081bp +0bps > s 5-year <PL5YT=RR 0.7530 -0.0210 +142bp +2bps > s <PL10YT=R 1.3490 0.0000 +181bp +5bps 10-year R> s FORWARD 3x6 6x9 9x12 3M interbank Czech < 0.37 0.38 0.42 0.34 Rep PRIBOR=> Hungary < 0.76 0.84 0.90 0.62 BUBOR=> Poland < 0.24 0.24 0.24 0.23 WIBOR=> Note: are for ask prices FRA quotes *********************************************** *************** (Additional reporting by Anita Komuves in Budapest, Jason Hovet in Prague and Alan Charlish in Warsaw; editing by John Stonestreet)

CEE MARKETS-FX up, mirrors euro gains; zloty shrugs off COVID-19 spike

04 Aug 2020

By Radu-Sorin Marinas BUCHAREST, Aug 4 The Polish zloty and the Czech crown led Central European currency gains on Tuesday, mirroring the euro's firming against the dollar, while shrugging off a spike in new coronavirus infections in the region's biggest economy. The euro, which strengthened 5% at the dollar's expense last month, inched up 0.2% on the day, with analysts predicting a faster economic recovery of the euro zone compared with that of the United States. The euro zone is Central Europe's main trading partner. "Equities in the U.S. yesterday ended up in green, so that set up the mood for today, and the euro/dollar going higher also helps. With euro/dollar going higher the zloty has really strengthened," a Warsaw-based currency trader said. Poland on Tuesday reported another record daily increase in new cases, with 680 infections, after a spike driven by outbreaks amongst miners and after public gatherings. The new record comes as Poland considers introducing stricter restrictions. By 0950 GMT, the Polish zloty and the Czech crown firmed by 0.45% each to 4.3980 and 26.1750 respectively. Hungary's forint inched up 0.1% at 344.67, while the Romanian leu lingered at 4.8350. The Hungarian central bank (NBH) said on Tuesday that it planned to "jump-start" the green bond market in the country, which will require a range of incentives by the bank and also other regulators. All stock indices rose in the region, with Prague rising for a second consecutive session by more than 0.7%. Warsaw and Bucharest's blue-chip index rose 0.5% each, while Budapest was up 0.4%. CEE SNAPSHOT AT 1140 MARKETS CET CURRENCIES Latest Previous Daily Change bid close change in 2020 Czech 26.1850 26.3000 +0.44% -2.88% crown Hungary 344.5000 344.8300 +0.10% -3.88% forint Polish 4.4030 4.4180 +0.34% -3.33% zloty Romanian 4.8340 4.8330 -0.02% -0.95% leu Croatian 7.4680 7.4743 +0.08% -0.30% kuna Serbian 117.5200 117.6200 +0.09% +0.04% dinar Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2020 Prague 898.58 892.1800 +0.72% -19.46% Budapest 34648.52 34620.25 +0.08% -24.81% Warsaw 1813.93 1804.38 +0.53% -15.63% Bucharest 8472.07 8431.74 +0.48% -15.09% Ljubljana 846.72 844.15 +0.30% -8.55% Zagreb 1579.44 1581.87 -0.15% -21.71% Belgrade 667.18 666.01 +0.18% -16.78% Sofia 436.05 436.59 -0.12% -23.25% Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year 0.0890 0.0410 +080bps +5bps 5-year 0.3740 -0.0060 +110bps +1bps 10-year <CZ10YT=RR 0.8360 0.0090 +137bps +3bps > Poland 2-year 0.1340 -0.0060 +085bps +1bps 5-year 0.6660 -0.0220 +139bps -1bps 10-year <PL10YT=RR 1.2600 -0.0460 +180bps -3bps > FORWARD 3x6 6x9 9x12 3M interba nk Czech Rep <P 0.33 0.32 0.35 0.34 RIBOR=> Hungary <B 0.61 0.60 0.60 0.60 UBOR=> Poland <W 0.19 0.16 0.16 0.23 IBOR=> Note: FRA are for ask prices quotes ****************************************************** ******** (Additional reporting by Alan Charlish in Warsaw; Editing by Maju Samuel)

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