CEE MARKETS-Forint eases as Hungary cbank restarts bond purchases

BUDAPEST, July 28 (Reuters) - The forint EURHUF= eased versus the euro early on Tuesday, underperforming central European currencies, as the National Bank of Hungary (NBH) relaunched government bond purchases after a two-month hiatus.

At 0813 GMT, the forint, the region's worst-performing unit this year, was down 0.3% at 346.51 per euro, while most other currencies were unchanged or marginally weaker.

The Hungarian central bank cut its base rate by 15 basis points to a new low of 0.6% last week and said it would start buying longer-dated government bonds to curb borrowing costs on longer maturities.

The bank, which launched the purchases in May to bolster the economy hit by the coronavirus pandemic, has bought 149 billion forints worth of bonds so far, most in the 10-year segment. On Tuesday it offered to purchase 15-year and 20-year bonds.

Yields on those maturities have fallen by 40 to 50 basis points since the bank announced the resumption of bond buys a week ago and one dealer said the near-term direction of the market would depend on the outcome of Tuesday's tender.

"We will see how aggressive the central bank is at today's tender," a Budapest-based bond trader said. "In May it was rather defensive, staying close to market levels, but then it suspended the QE programme.

"Given that yields have plunged by 50 points in these papers already, any continuation will depend on the central bank's approach," he said. "If they are aggressive, yields can fall further, if they are defensive, then not so much."

The Czech crown EURCZK= was a touch weaker, retreating from Monday's 4-1/2-month highs, with some dealers and analysts sayinga small correction could be around the corner after recent gains.

CEE MARKETS

SNAPSHOT

AT 1013 CET

CURRENCIES

Latest

Previous

Daily

Change

bid

close

change

in 2020

EURCZK=

Czech crown

EURCZK=

26.2100

26.1850

-0.10%

-2.97%

EURHUF=

Hungary forint

EURHUF=

346.5100

345.5000

-0.29%

-4.43%

EURPLN=

Polish zloty

EURPLN=

4.3933

4.3926

-0.02%

-3.12%

EURRON=

Romanian leu

EURRON=

4.8315

4.8285

-0.06%

-0.89%

EURHRK=

Croatian kuna

EURHRK=

7.5100

7.5142

+0.06%

-0.86%

EURRSD=

Serbian dinar

EURRSD=

117.5400

117.6150

+0.06%

+0.03%

Note: daily change

calculated from

1800 CET

Latest

Previous

Daily

Change

close

change

in 2020

.PX

Prague

.PX

918.05

914.0200

+0.44%

-17.71%

.BUX

Budapest

.BUX

34933.60

34979.41

-0.13%

-24.19%

.WIG20

Warsaw

.WIG20

1825.36

1830.87

-0.30%

-15.10%

.BETI

Bucharest

.BETI

8579.50

8586.12

-0.08%

-14.01%

.SBITOP

Ljubljana

.SBITOP

851.74

850.08

+0.20%

-8.01%

.CRBEX

Zagreb

.CRBEX

1584.45

1587.67

-0.20%

-21.46%

.BELEX15

Belgrade

.BELEX15

658.20

663.27

-0.76%

-17.90%

.SOFIX

Sofia

.SOFIX

439.87

439.88

-0.00%

-22.58%

Yield

Yield

Spread

Daily

(bid)

change

vs Bund

change in

Czech Republic

spread

CZ2YT=RR

2-year

CZ2YT=RR

0.1240

0.0740

+080bps

+7bps

CZ5YT=RR

5-year

CZ5YT=RR

0.4000

0.0550

+108bps

+6bps

CZ10YT=RR

10-year

CZ10YT=RR

0.8490

0.0150

+134bps

+2bps

Poland

PL2YT=RR

2-year

PL2YT=RR

0.1280

0.0010

+080bps

+0bps

PL5YT=RR

5-year

PL5YT=RR

0.7470

-0.0110

+143bps

-1bps

PL10YT=RR

10-year

PL10YT=RR

1.3580

0.0000

+185bps

+0bps

FORWARD

3x6

6x9

9x12

3M interbank

Czech Rep

CZKFRAPRIBOR=

0.31

0.32

0.36

0.34

Hungary

HUFFRABUBOR=

0.60

0.60

0.60

0.60

Poland

PLNFRAWIBOR=

0.19

0.20

0.21

0.24

Note: FRA quotes

are for ask prices

(Reporting by Gergely Szakacs in Budapest and Jason Hovet in Prague Editing by Jan Harvey and Raissa Kasolowsky)

((gergely.szakacs@reuters.com ; https://twitter.com/szakacsg ; +36 1 882 3606 ; https://www.reuters.com/journalists/gergely-szakacs))

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