Politics

Currencies ease on euro bounce, stocks join European rise

Reuters

By Sandor Peto

BUDAPEST, April 12 () - Central European currencies and government bonds eased on Friday amid a flow of money into the euro, government bonds in the euro zone peripheries and European stocks.

In the past two years dollar selling usually supported Central European currencies and they were sold along with other emerging market assets when there was dollar buying.

"This is a breeze rather than a storm."

The euro gained in a move dealers said could have been driven by expected currency demand arising from a Japanese bank's plans to purchase a German multibillion-dollar aviation finance business.

Currencies in the European Union's eastern wing eased less than 0.1 percent against the euro, with the exception of the dinar , which firmed a shade to 117.91.

The forint tested three-month lows near 322.50 versus the euro before rebounding to 322.35.

If it pierces technical resistance at 322.80, it could weaken to 325, Erste analysts said in a note.

It fell in recent weeks after the National Bank of Hungary last month dropped its earlier guidance of gradual monetary tightening and inflation data released in the region this week showed a rise in inflation.

The Czech crown also eased slightly, to 25.63 versus the euro, but stayed near the three-week highs set after Czech figures showed a rise in inflation to 3 percent, the top of the Czech central bank's (CNB) target range.

"We continue to expect the CNB to deliver another rate hike in the second half of this year," KBC analysts said in a note.

By that time the bank will have a clearer picture on the scope of economic slowdown in Western European export markets, the analysts added.

Stocks in the region mostly tracked a rise for Western European peers.

Budapest's main equities index , mainly driven by a 1.5 percent rise in oil group MOL , set a record high.

Hungarian and Polish government bond yields tracked a rise in Bund yields, ignoring a decline in some bond yields in the euro zone's peripheries.

Romanian bonds yields, however, retreated after this week's earlier boost from a rise in inflation. The 10-year paper was trading around 4.93 percent, off Thursday's 10-week highs.

CEE MARKETS SNAPSHOT AT 1159 CET
CURRENCIES
Latest Previous Daily Change
bid close change in 2019
Czech crown 25.6300 25.6200 -0.04% +0.30%
Hungary forint 322.3500 322.1900 -0.05% -0.39%
Polish zloty 4.2863 4.2827 -0.08% +0.08%
Romanian leu 4.7585 4.7550 -0.07% -2.20%
Croatian kuna 7.4350 7.4335 -0.02% -0.34%
Serbian dinar 117.9100 118.0000 +0.08% +0.33%
Note: daily change calculated from 1800 CET
Latest Previous Daily Change
close change in 2019
Prague 1094.98 1091.0300 +0.36% +10.99%
Budapest 42848.79 42693.52 +0.36% +9.48%
Warsaw 2378.27 2374.97 +0.14% +4.46%
Bucharest 8310.67 8328.02 -0.21% +12.55%
Ljubljana 884.29 883.93 +0.04% +9.95%
Zagreb 1809.04 1808.53 +0.03% +3.44%
Belgrade 738.55 736.14 +0.33% -3.04%
Sofia 573.65 579.03 -0.93% -3.50%
BONDS
Yield Yield Spread Daily
(bid) change vs Bund change in
Czech Republic spread
2-year 1.6410 -0.1880 +223bps -19bps
5-year 1.6760 -0.0020 +208bps -2bps
10-year 1.8310 0.0000 +181bps -3bps
Poland
2-year 1.6650 0.0010 +226bps +0bps
5-year 2.2410 0.0070 +264bps -2bps
10-year 0.2820 -2.6280 +026bps -265bps
FORWARD RATE AGREEMENT
3x6 6x9 9x12 3M interbank
Czech Rep 2.16 2.20 2.19 2.02
Hungary 0.35 0.52 0.70 0.16
Poland 1.75 1.75 1.75 1.72
Note: FRA quotes are for ask prices
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