CEE MARKETS-Stocks mixed as EU leaders struggle to strike stimulus deal

Credit: REUTERS/DAVID W CERNY

Central European stocks were mixed on Monday and currencies were little changed as investors watched EU leaders struggle to strike a deal on a coronavirus recovery fund at a summit that has been dragging on since Friday.

By Anita Komuves

BUDAPEST, July 20 (Reuters) - Central European stocks were mixed on Monday and currencies were little changed as investors watched EU leaders struggle to strike a deal on a coronavirus recovery fund at a summit that has been dragging on since Friday.

Signs emerged on Monday that leaders of northern European Union countries were willing to compromise on how to carve up the recovery fund. The meeting was adjourned on Monday until 1400 GMT.

"Markets expect a deal, and if it does not happen, that could mess things up," an FX trader in Budapest said.

"Besides, the Hungarian forint could be moved by what happens at the central bank meeting tomorrow, and markets will be watching whether the NBH touches any of its other tools besides the base rate," he added.

The bank is expected to cut its base rate by 15 basis points to 0.6% at the meeting, according to a Reuters poll of analysts.

The forint EURHUF= was up 0.3%, trading at 352.40 to the euro.

Elsewhere, the Czech crown EURCZK= edged up 0.04% to 26.625 to the euro while the Romanian leu EURRON= was little changed. The Polish zloty EURPLN= was up 0.1% on Monday, trading at 4.474 to the euro.

Poland's inflation may exceed the central bank's latest forecasts, which could prompt its rate-setting panel to consider a rate hike, central banker Lukasz Hardt said on Monday. June inflation at 3.3% was above forecasts.

The central bank, which has cut rates thrice to almost zero this year said in its inflation projection last week that it expected the consumer price index to fall to 1.5% in 2021 from 3.3% seen this year.

"NBP has cut rates significantly because of fear of deflation," Commerzbank said in a note. "This does not build up to a supportive picture for the zloty exchange rate for the coming months."

Warsaw's shares .WIG20 gained 0.6%, Budapest .BUX was largely flat and Prague .PX slipped 0.3%. Bucharest's stocks .BETI were up 0.12%.

CEE MARKETS

SNAPSHOT

AT 1012 CET

CURRENCIES

Latest

Previous

Daily

Change

bid

close

change

in 2020

Czech crown

EURCZK=

26.6250

26.6350

+0.04%

-4.48%

Hungary forint

EURHUF=

352.4000

353.4800

+0.31%

-6.03%

Polish zloty

EURPLN=

4.4740

4.4784

+0.10%

-4.86%

Romanian leu

EURRON=

4.8425

4.8420

-0.01%

-1.12%

Croatian kuna

EURHRK=

7.5285

7.5395

+0.15%

-1.10%

Serbian dinar

EURRSD=

117.5700

117.5950

+0.02%

+0.00%

Note: daily change

calculated from

1800 CET

Latest

Previous

Daily

Change

close

change

in 2020

Prague

.PX

945.92

949.0300

-0.33%

-15.21%

Budapest

.BUX

35,220.19

35,200.88

+0.05%

-23.57%

Warsaw

.WIG20

1,806.63

1,796.04

+0.59%

-15.97%

Bucharest

.BETI

8,522.40

8,511.80

+0.12%

-14.58%

Ljubljana

.SBITOP

870.47

871.46

-0.11%

-5.98%

Zagreb

.CRBEX

1,601.89

1,606.03

-0.26%

-20.60%

Belgrade

.BELEX15

658.88

658.49

+0.06%

-17.81%

Sofia

.SOFIX

442.03

442.27

-0.05%

-22.20%

Yield

Yield

Spread

Daily

(bid)

change

vs Bund

change in

Czech Republic

spread

2-year

CZ2YT=RR

0.1430

0.0890

+081bps

+8bps

5-year

CZ5YT=RR

0.4380

0.0130

+108bps

+0bps

10-year

CZ10YT=RR

0.9350

0.0350

+137bps

+2bps

Poland

2-year

PL2YT=RR

0.1270

0.0030

+079bps

+0bps

5-year

PL5YT=RR

0.7590

-0.0030

+140bps

-2bps

10-year

PL10YT=RR

1.3290

0.0100

+177bps

+0bps

FORWARD

3x6

6x9

9x12

3M interbank

Czech Rep

CZKFRAPRIBOR=

0.31

0.32

0.34

0.34

Hungary

HUFFRABUBOR=

0.63

0.58

0.56

0.70

Poland

PLNFRAWIBOR=

0.21

0.22

0.23

0.25

Note: FRA quotes

are for ask prices

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

(Reporting by Anita Komuves in Budapest; Additional reporting by Luiza Ilie in Bucharest; Editing by Vinay Dwivedi)

((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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