CEE MARKETS-Currencies unmoved, stocks down before EU summit

Credit: REUTERS/LASZLO BALOGH

Central European currencies were looking for direction and stocks were down on Friday before a European Union summit to discuss a 750 billion-euro coronavirus recovery fund.

By Anita Komuves

BUDAPEST, July 17 (Reuters) - Central European currencies were looking for direction and stocks were down on Friday before a European Union summit to discuss a 750 billion-euro coronavirus recovery fund.

Opposition from the Netherlands and the threat of a Hungarian veto weighed on chances of a deal.

The Hungarian forint EURHUF= was down 0.16% and trading at 354.05 to the euro, in a range where it has been stuck for weeks.

"The next impetus will come from the central bank's rate meeting next Tuesday," Equilor said in a note.

The bank is expected to cut its base rate by 15 basis points to 0.6% at the meeting, according to Reuters poll of analysts.

"This new 15 basis point rate cut has already been priced in by markets," CIB Bank wrote in a note. "If the bank confirms after Tuesday's meeting that no more easing is to be expected for the time being, then the effect on the forint could be modest."

Elsewhere, higher-than-expected inflation was expected by analysts to influence FX markets.

Czech consumer prices rose 3.3% year-on-year in June, above the central bank's target of 2% with a 1 percentage-point tolerance band.

Komercni Banka said that the crown could resume strengthening as market rates rise, since higher-than-expected inflation data last week led investors to scale back bets on a rate cut.

The crown EURCZK= was little changed on Friday, trading at 26.690 to the euro. The Polish zloty EURPLN= was unchanged at 4.479 versus the euro.

Polish net inflation rose to 4.1% year on year in June, above the NBP's upper tolerance limit of 3.5%.

"A high inflation rate makes the real interest rate more negative and if this does not change, it will hurt the zloty," Commerzbank wrote in a note.

Stocks in the region slid, with Warsaw's equities .WIG20 down 0.6%, Budapest .BUX losing 0.5% and Prague .PX easing 0.3%. Bucharest's stocks .BETI edged up 0.08%.

CEE MARKETS

SNAPSHOT

AT 1016 CET

CURRENCIES

Latest

Previous

Daily

Change

bid

close

change

in 2020

Czech crown

EURCZK=

26.6900

26.6990

+0.03%

-4.71%

Hungary forint

EURHUF=

354.0500

353.5000

-0.16%

-6.47%

Polish zloty

EURPLN=

4.4790

4.4790

+0.00%

-4.97%

Romanian leu

EURRON=

4.8435

4.8428

-0.01%

-1.14%

Croatian kuna

EURHRK=

7.5370

7.5403

+0.04%

-1.22%

Serbian dinar

EURRSD=

117.5600

117.6300

+0.06%

+0.01%

Note: daily change

calculated from

1800 CET

Latest

Previous

Daily

Change

close

change

in 2020

Prague

.PX

946.61

949.0900

-0.26%

-15.15%

Budapest

.BUX

35069.92

35229.08

-0.45%

-23.90%

Warsaw

.WIG20

1787.95

1799.08

-0.62%

-16.84%

Bucharest

.BETI

8433.15

8426.66

+0.08%

-15.48%

Ljubljana

.SBITOP

870.90

870.43

+0.05%

-5.94%

Zagreb

.CRBEX

1605.71

1609.10

-0.21%

-20.41%

Belgrade

.BELEX15

656.84

656.61

+0.04%

-18.07%

Sofia

.SOFIX

444.77

444.77

+0.00%

-21.71%

Yield

Yield

Spread

Daily

(bid)

change

vs Bund

change in

Czech Republic

spread

2-year

CZ2YT=RR

0.2080

0.0560

+089bps

+5bps

5-year

CZ5YT=RR

0.3760

-0.0680

+104bps

-8bps

10-year

CZ10YT=RR

0.8790

-0.0460

+135bps

-5bps

Poland

2-year

PL2YT=RR

0.1190

-0.0250

+080bps

-3bps

5-year

PL5YT=RR

0.7560

-0.0270

+142bps

-4bps

10-year

PL10YT=RR

1.3310

-0.0160

+180bps

-2bps

FORWARD

3x6

6x9

9x12

3M interbank

Czech Rep

CZKFRAPRIBOR=

0.34

0.35

0.35

0.34

Hungary

HUFFRABUBOR=

0.67

0.66

0.65

0.70

Poland

PLNFRAWIBOR=

0.20

0.20

0.22

0.25

Note: FRA quotes

are for ask prices

**************************************************************

(Additional reporting by Jason Hovet in Prague, editing by Larry King)

((komuves.anita@thomsonreuters.com (+36 70 795 8815))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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