CEE MARKETS-Forint paces FX gains on robust GDP, cbank verbal intervention

Credit: REUTERS/BERNADETT SZABO

The Hungarian forint paced regional gains on Friday morning, reacting to robust GDP growth and verbal intervention from the National Bank of Hungary against recent marked currency weakening.

By Anita Komuves

Feb 14 (Reuters) - The Hungarian forint EURHUF= paced regional gains on Friday morning, reacting to robust GDP growth and verbal intervention from the National Bank of Hungary against recent marked currency weakening.

The forint was bid at 335.25 against the euro, 0.7% stronger on the day, after hitting a record low of 340.31 on Wednesday.

"Both markets and analysts consider remarks by the central bank deputy governor as hawkish. But the words of the NBH will have to be followed by action," a dealer in Budapest said.

Dealers said markets paid close attention to NBH deputy governor Marton Nagy's remarks, which were delivered to investors in London earlier on Friday. Reuters confirmed the investor call took place but not what Nagy told participants.

The National Bank of Hungary (NBH) is the most dovish in the region and has kept its benchmark rate at a record low of 0.9% since 2016.

Hungary's economic growth HUGDPP=ECI slowed to an annual 4.5% in the fourth quarter from 5.0% in the third quarter, matching analyst forecasts and hitting its slowest in almost two years, preliminary unadjusted data showed on Friday.

Hungary's government expects economic growth at 3.5% this year, below its previous 4% forecast, Finance Minister Mihaly Varga said on Friday.

He added that recent falls in the forint were broadly neutral for the government budget and reiterated his view that Hungary needed a stable and predictable exchange rate.

"Despite the global and European slowdown the Hungarian economy is still growing, and that strengthens the forint," a dealer in Budapest said.

The Czech crown EURCZK= gained a third of a percent to its strongest since October 2012 after inflation grew at its fastest pace in almost eight years. The Czech central bank surprised markets with a rate hike last week.

The forint's gains also helped the crown's gains as well as other regional units, a dealer said.

The Czech economy expanded by an annual 1.7% in the fourth quarter, below expectations for 1.9% in a Reuters poll, marking the slowest pace in six years.

The Polish stock market .WIG20 and the zloty EURPLN= both traded flat after inflation rose faster than expected in January, reaching 4.4% year-on-year, a nine-year high, after a 3.4% reading in December.

** For an interactive graphic on GDP: https://tmsnrt.rs/2qMFUkq

CEE MARKETS

SNAPSHOT

AT 1049 CET

CURRENCIES

Latest

Previous

Daily

Change

bid

close

change

in 2020

EURCZK=

Czech crown

EURCZK=

24.7900

24.8805

+0.37%

+2.59%

EURHUF=

Hungary forint

EURHUF=

335.2500

337.7000

+0.73%

-1.22%

EURPLN=

Polish zloty

EURPLN=

4.2395

4.2466

+0.17%

+0.40%

EURRON=

Romanian leu

EURRON=

4.7675

4.7651

-0.05%

+0.44%

EURHRK=

Croatian kuna

EURHRK=

7.4490

7.4493

+0.00%

-0.05%

EURRSD=

Serbian dinar

EURRSD=

117.5600

117.5600

+0.00%

+0.01%

Note: daily change

calculated from

1800 CET

Latest

Previous

Daily

Change

close

change

in 2020

.PX

Prague

.PX

1101.66

1104.1000

-0.22%

-1.25%

.BUX

Budapest

.BUX

44947.71

44629.51

+0.71%

-2.46%

.WIG20

Warsaw

.WIG20

2121.38

2120.07

+0.06%

-1.34%

.BETI

Bucharest

.BETI

10091.58

10095.99

-0.04%

+1.15%

.SBITOP

Ljubljana

.SBITOP

980.91

977.64

+0.33%

+5.95%

.CRBEX

Zagreb

.CRBEX

2027.51

2029.20

-0.08%

+0.50%

.BELEX15

Belgrade

.BELEX15

815.18

816.52

-0.16%

+1.68%

.SOFIX

Sofia

.SOFIX

562.91

563.46

-0.10%

-0.92%

Yield

Yield

Spread

Daily

(bid)

change

vs Bund

change in

Czech Republic

spread

CZ2YT=RR

2-year

CZ2YT=RR

1.9690

0.1940

+262bps

+20bps

CZ5YT=RR

5-year

CZ5YT=RR

1.6220

-0.0130

+223bps

+0bps

CZ10YT=RR

10-year

CZ10YT=RR

1.5790

0.0630

+198bps

+7bps

Poland

PL2YT=RR

2-year

PL2YT=RR

1.6050

-0.0190

+225bps

-2bps

PL5YT=RR

5-year

PL5YT=RR

1.8390

-0.0270

+245bps

-2bps

PL10YT=RR

10-year

PL10YT=RR

2.1870

-0.0380

+259bps

-3bps

FORWARD

3x6

6x9

9x12

3M interbank

Czech Rep

CZKFRAPRIBOR=

2.37

2.31

2.27

2.39

Hungary

HUFFRABUBOR=

0.76

0.90

1.01

0.42

Poland

PLNFRAWIBOR=

1.73

1.74

1.73

1.71

Note: FRA quotes

are for ask prices

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

Central Europe growth slowing pnghttps://tmsnrt.rs/2R10yI5

Central Europe growth slowing interactivehttps://tmsnrt.rs/2qMFUkq

(Additional reporting by Jason Hovet in Prague and Alan Charlish in Warsaw; Editing by Maju Samuel)

((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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