Credit: REUTERS/Kacper PempelWARSAW, Oct 24 (Reuters) - Central European currencies weakened on Thursday, as markets awaited comments from Mario Draghi after his last meeting as European Central Bank President, following euro zone PMI data that showed business activity barely expanding in October.
Despite the ECB announcing plans for fresh stimulus in September, euro zone private sector activity has barely expanded in October, according to IHS Markit's flash composite PMI data.
"If the activity in the euro zone economies is not doing all that well we are going to suffer the same fate in some time, especially since Germany is not doing all that hot," said Piotr Poplawski, senior economist at ING.
The Polish zloty EURPLN= fell 0.11% against the euro to 4.279, while the Hungarian forint EURHUF= fell 0.38% to 329.4 and the Czech crown EURCZK= was little changed at 25.619.
The Czech currency shed as much as 0.4% on Wednesday after Czech central bank vice-governor Marek Mora was quoted by Bloomberg as saying the arguments for an interest rate hike have weakened since the last meeting.
Draghi will bow out as head of the ECB at the end of the month, and his final meeting in charge is not expected to see any policy action, but rather a defence of his decision to restart the ECB's bond-buying programme despite opposition from a large number of rate setters.
"We expect stronger than usual calls from Draghi to start loosening fiscal policy in Europe to support economic growth in the euro zone in synergy with the ECB's monetary policy," Bank Millennium analysts said in a note.
Polish 10-year yields PL10YT=RR rose 2.3 basis points to 1.986% while Czech 10-year paper CZ10YT=RR traded at 1.385%, up 1.5 basis points.
The moves tracked euro zone yields after the bleak tone for business activity set by the PMI readings.
The region's stock markets were mainly in positive territory, with the exception being Warsaw, where the WIG 20 index .WIG20 was down 0.32%.
The index was dragged down by Poland's biggest refiner PKN Orlen PKN.WA which fell 4% after its third-quarter net profit missed analysts' estimates.
CEE MARKETSSNAPSHOTAT 1242 CETCURRENCIESLatest Previous Daily Change bid close change in 2019 Czech crown EURCZK= 25.619025.6220+0.01%+0.34%Hungary forint EURHUF= 329.4000328.1400-0.38%-2.52%Polish zloty EURPLN= 4.27904.2743-0.11%+0.25%Romanian leu EURRON= 4.75104.7560+0.11%-2.04%Croatian kuna EURHRK= 7.45007.4410-0.12%-0.54%Serbian dinar EURRSD= 117.5300117.6100+0.07%+0.66%Note: daily change calculated from 1800 CETLatest Previous Daily Change close change in 2019 Prague .PX 1065.921059.2900+0.63%+8.04%Budapest .BUX 42142.4641845.95+0.71%+7.67%Warsaw .WIG20 2201.412208.54-0.32%-3.30%Bucharest .BETI 9629.349619.19+0.11%+30.41%Ljubljana .SBITOP 870.65873.15-0.29%+8.25%Zagreb .CRBEX 2020.382017.20+0.16%+15.53%Belgrade .BELEX15 752.51753.18-0.09%-1.21%Sofia .SOFIX 558.35559.56-0.22%-6.07%BONDSYield Yield Spread Daily (bid) change vs Bund change in Czech Republic spread 2-year CZ2YT=RR 1.28700.0520+195bps +5bps 5-year CZ5YT=RR 1.11900.0520+175bps +5bps 10-year CZ10YT=RR 1.38500.0150+177bps +0bps Poland 2-year PL2YT=RR 1.49700.0040+216bps +0bps 5-year PL5YT=RR 1.72600.0070+236bps +0bps 10-year PL10YT=RR 1.98600.0230+237bps +1bps FORWARDRATEAGREEMENT3x6 6x9 9x12 3M interbank Czech Rep CZKFRAPRIBOR= 2.212.172.072.18Hungary HUFFRABUBOR= 0.270.330.310.21Poland PLNFRAWIBOR= 1.741.701.671.72Note: FRA quotes are for ask prices **************************************************************(Reporting by Alan Charlish; Editing by Hugh Lawson) ((alan.charlish@thomsonreuters.com; +48 22 653 9723;)) |
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