PX

CEE MARKETS-Forint hits 5-week low in SVB fallout, stocks get slight relief

Credit: REUTERS/Bernadett Szabo

By Jason Hovet and Krisztina Than

PRAGUE, March 14 (Reuters) - Hungary's forint slumped to a five-week low before regaining some session losses on Tuesday, while the Czech crown also hit its lowest since early February, with markets staying nervous after the collapse of Silicon Valley Bank last week.

Markets were hit hard on Monday after the failure of SVB and New York's Signature Bank over the weekend even after the U.S. government took steps to shore up systemic confidence.

The market rout undid weeks of gains for central Europe's currencies and cut much of the rise seen so far in 2023 that had pushed currencies to multi-month or multi-year highs.

The forint EURHUF=, after trading at its highest since April 2022 at below 380 to the euro to start March, was on the retreat again on Tuesday, creeping toward the big psychological level of 400.

It was traded at 395.75, down 0.7% on the day, at 0921 GMT, and has fallen over 3% in the past two days.

"We cannot see a positive reversal of this today," Equilor analysts said. "In the short term the chart shows (the euro) is overbought but we can see an important resistance only at the levels round 399-400."

The forint has the added pressure of a bubbling policy dispute between the Hungarian central bank and government, with the latter wanting policy easing as the economy weakens. Hungary's base rate is the highest in the European Union as the bank battles inflation that is hovering above 20%.

Fears of a potential banking crisis after SVB's collapse caused global markets to scale back expectations of U.S. rate hikes, which would impact policy outlooks in central Europe, where rate setters are holding steady now after sharp hiking cycles in 2021-2022.

Elsewhere, the Polish zloty EURPLN= eased 0.2% and stock markets were mixed but drifting mostly after banking stocks took a heavy hit on Monday.

The Czech crown EURCZK=, which had touched a nearly 15-year high earlier in March, was at a five-week low on Tuesday, trading 0.4% lower on the day at 23.835 to the euro.

Czech retail sales slipped for a ninth consecutive month in January, data showed, as high inflation continued to hit consumer demand.

Markets were also tuned to U.S. inflation data later in the day, while the European Central Bank will meet on Thursday.

Bond yields remained at one-month lows in the Czech Republic and Poland after a large drop on Monday, tracking core rates.

"Today, EUR rates have dropped notably on the front end even as some ECB representatives expressed willingness to carry on with hiking," Komercni Banka trader Marek Lesko said.

"Any large surprise in the US CPI released today might add more fire to the extreme market volatility."

CEE MARKETS

SNAPSHOT

AT 1021 CET

CURRENCIES

Latest

Previous

Daily

Change

bid

close

change

in 2023

EURCZK=

Czech crown

EURCZK=

23.8350

23.7400

-0.40%

+1.36%

EURHUF=

Hungary forint

EURHUF=

395.7500

393.1000

-0.67%

+0.93%

EURPLN=

Polish zloty

EURPLN=

4.6930

4.6845

-0.18%

-0.07%

EURRON=

Romanian leu

EURRON=

4.9235

4.9185

-0.10%

+0.39%

EURHRK=

Croatian kuna

EURHRK=

7.5330

7.5365

+0.05%

+0.05%

EURRSD=

Serbian dinar

EURRSD=

117.2000

117.3000

+0.09%

+0.09%

Note: daily change

calculated from

1800 CET

Latest

Previous

Daily

Change

close

change

in 2023

.PX

Prague

.PX

1351.12

1346.1800

+0.37%

+12.43%

.BUX

Budapest

.BUX

41723.92

41797.81

-0.18%

-4.73%

.WIG20

Warsaw

.WIG20

1742.39

1753.30

-0.62%

-2.77%

.BETI

Bucharest

.BETI

12256.57

12255.19

+0.01%

+5.08%

.SBITOP

Ljubljana

.SBITOP

1184.45

1184.09

+0.03%

+12.93%

.BELEX15

Belgrade

.BELEX15

895.14

894.45

+0.08%

+8.55%

.SOFIX

Sofia

.SOFIX

624.24

625.09

-0.14%

+3.78%

Yield

Yield

Spread

Daily

(bid)

change

vs Bund

change in

Czech Republic

spread

CZ2YT=RR

2-year

CZ2YT=RR

5.6070

-0.2300

+287bps

-26bps

CZ5YT=RR

5-year

CZ5YT=RR

4.9850

-0.0450

+262bps

-8bps

CZ10YT=RR

10-year

CZ10YT=RR

4.6200

-0.0020

+230bps

-4bps

Poland

PL2YT=RR

2-year

PL2YT=RR

5.9820

-0.0450

+325bps

-8bps

PL5YT=RR

5-year

PL5YT=RR

6.0690

0.0770

+370bps

+4bps

PL10YT=RR

10-year

PL10YT=RR

6.1090

0.0940

+379bps

+6bps

FORWARD

3x6

6x9

9x12

3M interbank

Czech Rep

CZKFRAPRIBOR=

7.13

6.83

6.24

7.20

Hungary

HUFFRABUBOR=

14.95

13.27

12.07

16.29

Poland

PLNFRAWIBOR=

6.82

6.55

6.06

6.92

Note: FRA quotes

are for ask prices

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

(Reporting by Jason Hovet in Prague, Krisztina Than in Budapest, and Anna Wlodarczak-Semczuk in Warsaw; Editing by Krishna Chandra Eluri)

((jason.hovet@thomsonreuters.com))

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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