CEE MARKETS-Forint holds near 8-month highs, CEZ shares pare gains

4ig.

27/01/2023 10:21

By Jason Hovet
       PRAGUE, Jan 27 (Reuters) - Hungary's forint clung to
eight-month peaks on Friday, with markets still wary of an S&P
ratings review due later in the day, while most other central
European currencies and stock markets also firmed.
    A stronger euro on Friday lent some support to the region's
currencies. But bond yields, rallying so far in 2023, were mixed
on Friday, with Polish yields ticking down.
    Citigroup said in a note it was cutting some of its
"underweight" position in Hungary and Poland.
    "The current bullish EUR/USD environment and brighter
economic prospects for the euro zone will be supportive for both
credits," it said.
    On currency markets, the forint  EURHUF=  has gained more
than 3% so far in 2023 amid good early-year sentiment, helped by
lower gas prices cutting energy risks. Investors also hope
Budapest will reach a deal to unfreeze European Union funds
locked in rule-of-law disputes.
    The forint was 0.1% stronger on the day at 387.40 to the
euro at 0956 GMT after trading on the strong side of the 387
level in the past two sessions.
    Hungary will face an S&P ratings decision after-trading
hours on Friday. It currently holds a BBB rating with a negative
outlook.
    "The most likely scenario is that S&P will warn of the risks
but hold off on downgrading because of the new deadline,"
Equilor brokerage said. 
    "Domestic inflation remains elevated and exposure to Russian
energy remains high, but no supply problems have emerged and
European natural gas prices have fallen significantly, which
could ease pressure on the current account."
    Elsewhere, the Czech crown  EURCZK=  was just off 14-year
highs hit this week, trading up less than 0.1% at 23.807 to the
euro. The yield on a 10-year bond  CZ10YT=RR  was bid higher at
4.50%, after easing in recent session after hitting a five-month
low of 4.20% last week.
    The Czech central bank meets on rates next 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.
    Poland's zloty  EURPLN=  also edged higher to 4.708 per
euro, while Romania's leu  EURRON=  shed 0.3%.
    Prague's bourse fell, pulled lower by majority state-owned
utility CEZ  CEZP.PR , which gave up some of its strong recent
gains amid speculation over its restructuring that the
government has been discussing.
    CEZ shares are still holding at three-month highs.
                   CEE        SNAPSHO   AT                      
                   MARKETS    T        1056              
                                       CET               
                              CURRENC                           
                              IES                        
                              Latest   Previou  Daily    Change
                                       s                 
                              bid      close    change   in 2023
 EURCZK  Czech      EURCZK=   23.8070  23.8220   +0.06%   +1.47%
 =       crown                                           
 EURHUF  Hungary    EURHUF=   387.450  387.900   +0.12%   +3.09%
 =       forint                     0        0           
 EURPLN  Polish     EURPLN=    4.7080   4.7135   +0.12%   -0.39%
 =       zloty                                           
 EURRON  Romanian   EURRON=    4.8925   4.8758   -0.34%   +1.02%
 =       leu                                             
 EURHRK  Croatian   EURHRK=    7.5330   7.5365   +0.05%   +0.05%
 =       kuna                                            
 EURRSD  Serbian    EURRSD=   117.310  117.350   +0.03%   -0.01%
 =       dinar                      0        0           
         Note:     calculate                    1800            
         daily     d from                       CET      
         change                                          
                                                                
                              Latest   Previou  Daily    Change
                                       s                 
                                       close    change   in 2023
 .PX     Prague     .PX       1318.07  1320.41   -0.18%   +9.68%
                                            00           
 .BUX    Budapest   .BUX      47049.0  46817.9   +0.49%   +7.43%
                                    5        2           
 .WIG20  Warsaw     .WIG20    1916.19  1911.61   +0.24%   +6.93%
 .BETI   Buchares   .BETI     12227.5  12228.2   -0.01%   +4.84%
         t                          9        1           
 .SBITO  Ljubljan   .SBITOP   1114.58  1112.08   +0.22%   +6.27%
 P       a                                               
 .BELEX  Belgrade  <.BELEX15   846.60   840.76   +0.69%   +2.67%
 15                >                                     
 .SOFIX  Sofia      .SOFIX     614.48   616.38   -0.31%   +2.16%
                                                                
                              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      CZKFRA <     7.14     6.87     6.37     7.21
         Rep       PRIBOR=>                              
         Hungary    HUFFRA <    14.30    12.45    11.00    16.02
                   BUBOR=>                               
         Poland     PLNFRA <     6.94     6.85     6.45     6.95
                   WIBOR=>                               
         Note:     are for                                      
         FRA       ask                                   
         quotes    prices                                
         *************************************                  
         *************************                       
                                                                
 (Reporting by Jason Hovet in Prague, Krisztina Than in Budapest
and Alan Charlish in Warsaw; Editing by Sherry Jacob-Phillips)
 ((jason.hovet@thomsonreuters.com))
 
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