CEE MARKETS-Hungary's forint lags as central bank seen staying dovish
By Krisztina Than
BUDAPEST, June 20 (Reuters) - The forint slightly lagged other central European currencies on Thursday on expectations that the Hungarian central bank will next week put off policy tightening after the European Central Bank flagged further stimulus.
Mario Draghi, the head of the ECB, said on Tuesday it was prepared to cut interest rates or resume bond purchases if the inflation outlook did not improve.
The Federal Reserve on Wednesday signalled possible rate cuts of as much as half a percentage point in 2019, which helped emerging market currencies globally.
The forint EURHUF= , however, failed to benefit. At 0901 GMT, it was down 0.05% at 324.30 to the euro. The Polish zloty EURPLN= was trading 0.16% higher in offshore deals, and the Czech crown was up 0.11%. The Polish and Romanian markets are closed for a holiday.
"We expect the forint to ease further and, as the ECB flagged fresh monetary loosening, the National Bank of Hungary will likely maintain its rather dovish monetary communication at its next meeting on Tuesday," brokerage Equilor said in a note.
Erste bank analysts agreed. "The June rate-setting meeting ...would not bring any step pointing to normalization," they said.
According to a Reuters poll published on Thursday, all 15 analysts forecast Hungary's base rate HUINT=ECI will remain at 0.9% on June 25, when the NBH will also provide key forecasts from its quarterly inflation report.
Economists in the June survey were divided over the prospect of an increase in Hungary's -0.05% deposit rate, with nine of 14 analysts saying the rate would stay flat.
Hungarian interbank rates were little changed according to a fixing BUBOR, despite an extraordinary injection by the central bank on Wednesday to ease a liquidity squeeze partly caused by big value-added tax payments by companies.
"The liquidity shortage prevails. Somehow this money was not enough," a fixed income trader said in Budapest. But he said a large amount of a government bond will mature early next week which should boost liquidity again.
Hungary sold more bonds than planned at an auction on Thursday, with yields falling across the board.
CEE MARKETS
SNAPSHOT
AT 1101 CET
CURRENCIES
Latest
Previous
Daily
Change
bid
close
change
in 2019
EURCZK=
Czech crown
EURCZK=
25.6200
25.6490
+0.11%
+0.34%
EURHUF=
Hungary forint
EURHUF=
324.3000
324.1500
-0.05%
-0.99%
EURPLN=
Polish zloty
EURPLN=
4.2608
4.2676
+0.16%
+0.68%
EURRON=
Romanian leu
EURRON=
4.7301
4.7291
-0.02%
-1.61%
EURHRK=
Croatian kuna
EURHRK=
7.4010
7.4025
+0.02%
+0.12%
EURRSD=
Serbian dinar
EURRSD=
117.7400
117.8800
+0.12%
+0.48%
Note: daily change
calculated from
1800 CET
Latest
Previous
Daily
Change
close
change
in 2019
.PX
Prague
.PX
1056.07
1057.5600
-0.14%
+7.05%
.BUX
Budapest
.BUX
40747.35
40980.24
-0.57%
+4.11%
.WIG20
Warsaw
.WIG20
2319.71
2319.71
+0.00%
+1.89%
.BETI
Bucharest
.BETI
8607.28
8582.84
+0.28%
+16.57%
.SBITOP
Ljubljana
.SBITOP
885.52
883.36
+0.24%
+10.10%
.CRBEX
Zagreb
.CRBEX
1901.57
1901.57
+0.00%
+8.74%
.BELEX15
Belgrade
.BELEX15
714.83
720.02
-0.72%
-6.15%
.SOFIX
Sofia
.SOFIX
579.68
579.98
-0.05%
-2.49%
BONDS
Yield
Yield
Spread
Daily
(bid)
change
vs Bund
change in
Czech Republic
spread
CZ2YT=RR
2-year
CZ2YT=RR
1.6030
0.0710
+234bps
+9bps
CZ5YT=RR
5-year
CZ5YT=RR
1.4270
-0.0250
+208bps
-1bps
CZ10YT=RR
10-year
CZ10YT=RR
1.5370
-0.0360
+184bps
-2bps
Poland
PL2YT=RR
2-year
PL2YT=RR
1.5700
-0.0180
+230bps
+0bps
PL5YT=RR
5-year
PL5YT=RR
1.9820
0.0170
+263bps
+3bps
PL10YT=RR
10-year
PL10YT=RR
2.3870
0.0190
+269bps
+4bps
FORWARD
RATE
AGREEMENT
3x6
6x9
9x12
3M interbank
Czech Rep
CZKFRAPRIBOR=
2.16
2.05
1.92
2.17
Hungary
HUFFRABUBOR=
0.29
0.40
0.50
0.25
Poland
PLNFRAWIBOR=
1.74
1.73
1.71
1.72
Note: FRA quotes
are for ask prices
(Reporting by Krisztina Than; editing by John Stonestreet)
((krisztina.than@thomsonreuters.com; +36 1 327 4745; Reuters Messaging: krisztina.than.thomsonreuters.com@reuters.net))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.