CEE MARKETS-Forint eases after S&P downgrade, other currencies hold steady

4ig.

30/01/2023 09:37

By Krisztina Than
       BUDAPEST, Jan 30 (Reuters) - The forint eased on Monday,
underperforming its peers, and Hungarian stocks fell after S&P
downgraded the country's debt rating late on Friday, citing
persistently high inflation.
    Credit ratings agency S&P cut Hungary's long- and short-term
foreign and local currency ratings to 'BBB-/A-3' from 'BBB/A-2'
on Friday, three weeks after Fitch cut its outlook on Hungary's
long-term foreign currency issuer default rating to "negative"
from "stable".
    The forint  EURHUF= , which has gained 1.8% so far in 2023,
retreated on Monday, easing about 0.9%, while other regional
currencies were broadly stable. The shares of OTP Bank  OTPB.BU 
dropped 2.3% by 0916 GMT. The Budapest bourse index  .BUX  fell
1.75% by 0916 GMT while Warsaw stocks  .WIG20  were 0.9% lower.
    "The forint is weakening on the news of the downgrade ...
with the exchange rate easing past the 389 support but there is
an important resistance level at 392," brokerage Equilor said.
    The forint's losses were contained amid a generally positive
emerging market sentiment. 
    Analysts at Magyar Bankholding said in a note that
volatility could increase in Central European currency markets
this week as both the Federal Reserve and the European Central
Bank (ECB) will hold rate metings, which will have implications
for the region.
    The region's currencies have been helped by lower gas prices
in recent weeks.
    "Correlation between CEE currencies and European gas prices
has increased substantially since Q4 2022," Citigroup said in a
note.  
    The Czech bank meets to decide on interest rates later this
week and is widely seen holding rates steady for a fifth
straight meeting after taking the key policy to a more than
two-decade high last year.
    The Czech crown  EURCZK=  was just off 14-year highs hit
last week, trading flat at 23.815 to the euro. 
    "(And) the National Bank of Hungary is likely to keep its
hawkishness for longer until the CPI peaks," Citigroup added. 
    Hungary's annual inflation was running at 24.5% in December
and is expected to accelerate further in January. 
                   CEE      SNAPSHO   AT                      
                   MARKETS  T        0938              
                                     CET               
                            CURRENC                           
                            IES                        
                            Latest   Previou  Daily    Change
                                     s                 
                            bid      close    change   in 2023
 EURCZK  Czech                                       
 EURHUF  Hungary                0        0           
 EURPLN  Polish                                      
 EURRON  Romanian                                    
 EURHRK  Croatian                                    
 EURRSD  Serbian                0        0           
         Note:     calculated from            1800            
         daily                                CET      
         change                                        
                                                              
                            Latest   Previou  Daily    Change
                                     s                 
                                     close    change   in 2023
 .PX     Prague     .PX     1330.10  1331.01   -0.07%   +10.68
                                          00                 %
 .BUX    Budapest   .BUX    46040.3  46645.4   -1.30%   +5.13%
                                  0        1           
 .WIG20  Warsaw    <.WIG20  1891.81  1911.50   -1.03%   +5.57%
                   >                                   
 .BETI   Buchares   .BETI   12197.0  12185.7   +0.09%   +4.57%
         t                        2        9           
 .SBITO  Ljubljan  <.SBITO  1117.06  1111.48   +0.50%   +6.51%
 P       a         P>                                  
 .BELEX  Belgrade  <.BELEX   848.85   852.41   -0.42%   +2.94%
 15                15>                                 
 .SOFIX  Sofia     <.SOFIX   615.16   614.04   +0.18%   +2.27%
                   >                                   
                                                              
                            Yield    Yield    Spread   Daily
                            (bid)    change   vs Bund  change
                                                       in
         Czech                                         spread
         Republic                                      
 CZ2YT=    2-year                                s  
 CZ5YT=    5-year                                s  
 CZ10YT                                         s  
         Poland                                               
 PL2YT=    2-year                                s  
 PL5YT=    5-year                                s  
 PL10YT                                         s  
                   FORWARD                                    
                            3x6      6x9      9x12     3M
                                                       interba
                                                       nk
         Czech                                      
         Hungary                                     
         Poland                                      
         Note:     are for ask                                
         FRA       prices                              
         quotes                                        
         ********************************************         
         ******************                            
                                                              
 (Reporting by Jason Hovet in Prague, Krisztina Than in
Budapest; Editing by Christina Fincher)
 ((krisztina.than@thomsonreuters.com))
 
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