CEE MARKETS-Forint firms against euro on deposit facility rate hike

By Anita Komuves

BUDAPEST, Sept 25 (Reuters)The Hungarian forint firmed for a second straight session on Friday, after the central bank raised interest rate on its one-week deposit facility.

The forint EURHUF= was up 0.32% at 362.640 against the euro. The currency came under pressure recently, hitting a five-month low earlier this week, as traders remained wary about the economic effects of a coronavirus resurgence.

Hungary’s central bank unexpectedly raised the interest rate on its one-week deposit facility by 15 basis points to 0.75% on Thursday at a tender, after keeping all of its main rates unchanged earlier this week.

The rate hike immediately lifted the forint, but analysts say that the effect could be temporary and the forint will likely stay above the 360 level.

“The strengthening is a short-term correction. In this negative global sentiment, I expect the forint to weaken back to levels of 365-366 in the next few days,” a Budapest-based forex trader said.

“The rate hike is a double-edged sword. Foreign investors could try and speculate on this in the future, and thus, weaken the forint,” she added.

“Foreign investors started weakening the forint on Monday, then the central bank stepped in,” another trader said.

“They will keep testing the bank. If the cat jumps on the new toy mouse, someone will keep playing with that toy.”

Elsewhere, the Czech crown EURCZK= gained 0.65% and was trading at 26.991 while the Polish zloty EURPLN= firmed 0.21% to 4.5515. The Romanian leu 4.8790 edged down 0.07% to 4.8790.

Stock markets recouped some of their losses from the previous session, as a rebound in U.S. equities lifted sentiment. L5N2GM1BX

Budapest’s stocks .BUX led gains in the region, firming 0.75%, while Prague’s equities .PX were up 0.22%. Warsaw’s blue chip index .WIG20 gained 0.27%, while Bucharest .BETI was up 0.62%.

CEE MARKETS

SNAPSHOT

AT 1014 CET

CURRENCIES

Latest

Previous

Daily

Change

bid

close

change

in 2020

EURCZK=

Czech crown

EURCZK=

26.9910

27.1660

+0.65%

-5.78%

EURHUF=

Hungary forint

EURHUF=

362.6400

363.7900

+0.32%

-8.68%

EURPLN=

Polish zloty

EURPLN=

4.5515

4.5611

+0.21%

-6.48%

EURRON=

Romanian leu

EURRON=

4.8790

4.8756

-0.07%

-1.86%

EURHRK=

Croatian kuna

EURHRK=

7.5499

7.5505

+0.01%

-1.38%

EURRSD=

Serbian dinar

EURRSD=

117.5000

117.6000

+0.09%

+0.06%

Note: daily change

calculated from

1800 CET

Latest

Previous

Daily

Change

close

change

in 2020

.PX

Prague

.PX

864.96

863.0900

+0.22%

-22.47%

.BUX

Budapest

.BUX

32136.35

31898.01

+0.75%

-30.26%

.WIG20

Warsaw

.WIG20

1670.48

1665.96

+0.27%

-22.31%

.BETI

Bucharest

.BETI

9086.45

9030.78

+0.62%

-8.93%

.SBITOP

Ljubljana

.SBITOP

851.40

846.80

+0.54%

-8.04%

.CRBEX

Zagreb

.CRBEX

1637.29

1638.11

-0.05%

-18.84%

.BELEX15

Belgrade

.BELEX15

692.38

691.80

+0.08%

-13.63%

.SOFIX

Sofia

.SOFIX

423.39

425.21

-0.43%

-25.48%

Yield

Yield

Spread

Daily

(bid)

change

vs Bund

change in

Czech Republic

spread

CZ2YT=RR

2-year

CZ2YT=RR

0.0650

-0.0200

+076bps

-2bps

CZ5YT=RR

5-year

CZ5YT=RR

0.5280

-0.0380

+124bps

-4bps

CZ10YT=RR

10-year

CZ10YT=RR

0.8650

-0.0120

+138bps

-1bps

Poland

PL2YT=RR

2-year

PL2YT=RR

0.0440

-0.0410

+074bps

-4bps

PL5YT=RR

5-year

PL5YT=RR

0.6310

-0.0270

+134bps

-3bps

PL10YT=RR

10-year

PL10YT=RR

1.3230

-0.0150

+184bps

-1bps

FORWARD

3×6

6×9

9×12

3M interbank

Czech Rep

CZKFRAPRIBOR=

0.30

0.30

0.36

0.34

Hungary

HUFFRABUBOR=

1.00

1.05

1.11

0.65

Poland

PLNFRAWIBOR=

0.19

0.19

0.20

0.22

Note: FRA quotes

are for ask prices

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

(Reporting by Anita Komuves; Editing by Rashmi Aich)

(([email protected] (+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.

Source Article