CEE MARKETS-Forint hits five-month high before slight retreat, crown also pulls back

4ig.

18/01/2023 10:20

By Jason Hovet
       PRAGUE, Jan 18 (Reuters) - Hungary's forint scaled a
five-month high against the euro on Wednesday and the Czech
crown tested a 12-year peak before both retreated somewhat as
central European currencies largely moved sideways.
    On debt markets, investors looked to a Czech auction on
Wednesday in which the Finance Ministry was offering short-term
treasury bills denominated in euros, not crowns, for the first
time.
    Stock markets mostly firmed, following European peers higher
amid positive updates from company earnings. 
    In Hungary, the forint  EURHUF=  was up 0.2% at 395.15 to
the euro in mid-morning trade after reaching as high as 393.30.
    The currency is 1.1% stronger so far in 2023 and has gained
steadily since December, first getting a boost from Budapest's
moves to unlock European Union funds frozen in a dispute over
rule of law issues, and more recently lifted by easing gas
prices and a weaker U.S. dollar.
    "Our EMFX factor framework has reduced the allocation to HUF
while positioning is getting stretched. We still prefer to
express our constructive HUF stance through relative value
trades and remain short PLN/HUF," Morgan Stanley wrote in a
note.
    Poland's zloty  EURPLN=  edged 0.3% lower, but stuck in
ranges seen to start 2023. Analysts see range trading
continuing.
    The crown  EURCZK=  also pulled off session highs
approaching 23.920 to the euro, retreating alongside the forint,
traders said. It traded at 23.98 to the euro, or 0.15% lower on
the day, at 1003 GMT.
    Analysts have seen few impulses for further gains for the
crown, which led central Europe in 2022 with a 3% rise.
    The Czech central bank has held steady on interest rates for
the past half-year, and while policymakers have not ruled out a
further hike, vice-Governor Eva Zamrazilova reiterated on
Wednesday that a preemptive rate raise was not right.
    The Czech Finance Ministry was planning its first
euro-denominated T-bill auction on Wednesday, with results due
midday. It has already been offering government bonds in euros,
issued under Czech law, to satisfy its foreign currency
borrowing needs, and will begin doing the same for short-term
debt.  CNB05 
    "Looking at comparable short-term EUR debt, we expect yields
around 2.10–2.40 but with less confidence as Czech EUR T-BILLs
are a novelty," Komercni Banka trade Marek Lesko said.
                   CEE      SNAPSHO   AT                      
                   MARKETS  T        1103              
                                     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     1278.81  1271.37   +0.59%   +6.41%
                                          00           
 .BUX    Budapest   .BUX    46680.2  46313.7   +0.79%   +6.59%
                                  0        0           
 .WIG20  Warsaw    <.WIG20  1906.32  1904.51   +0.10%   +6.38%
                   >                                   
 .BETI   Buchares   .BETI   12078.8  11959.9   +0.99%   +3.56%
         t                        5        1           
 .SBITO  Ljubljan  <.SBITO  1103.93  1106.44   -0.23%   +5.26%
 P       a         P>                                  
 .CRBEX  Zagreb    <.CRBEX  2068.14  2054.39   +0.67%   +687.0
                   >                                        5%
 .BELEX  Belgrade  <.BELEX   832.01   843.22   -1.33%   +0.90%
 15                15>                                 
 .SOFIX  Sofia     <.SOFIX   616.31   616.48   -0.03%   +2.46%
                   >                                   
                                                              
                            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, Anna Wlodarczak-Semczuk in
Warsaw, and Krisztina Than in Budapest; Editing by Krishna
Chandra Eluri)
 ((jason.hovet@thomsonreuters.com))
 
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