CEE MARKETS-Czech Crown firm after inflation disappoints ahead of interest rate decision

Doosan Skoda Power as

06/02/2025 11:12

WARSAW, Feb 6 (Reuters) - The Czech crown held firm on
Thursday, after higher than expected inflation data ahead of the
Czech National Bank's (CNB) interest rate decision, while other
currencies gave up some of Wednesday's gains, pressured by a
firmer dollar.
    Czech inflation slowed by less than expected to an annual
2.8% in January, a statistics office flash estimate showed, as
central bankers meet to decide whether to restart a monetary
easing cycle.
    One Prague-based trader said the slower-than-expected fall
in inflation may raise some uncertainty on the rate outlook, but
was not likely to change expectations of a cut on Thursday.
    "We slightly lean towards a 25-basis-point rate cut.
However, this is not certain, as the CNB will likely choose
between a rate cut and maintaining stability," Erste Group Bank
analysts said in a note.
    "Today's data slightly favor stability, but weak
macroeconomic data from Germany in recent weeks push in the
opposite direction."
    By 1033 GMT the Czech crown  EURCZK=  edged 0.1% higher
against the euro to 25.1140, its strongest level this week.
    On the stock market, Doosan Skoda Power  DSPW.PR  started
trading after its Prague IPO with shares up 15%, while Komercni
Banka's  BKOM.PR  strong results and pledge to pay out 100% of
2025 profit in dividends lifted its shares by 3.6%.
    In Poland, the zloty  EURPLN=  eased 0.1% to 4.2040, off of
an almost seven-year high of 4.1940 touched on Wednesday after
the National Bank of Poland (NBP) kept rates steady, extending
the pause since its bout of surprise easing in autumn 2023.
    "Monetary policy, therefore, remains restrictive and there
is little indication that this situation will change in the
short term," BOS Bank chief FX analyst Marek Rogalski said.
    "This continues to support the zloty, and the EURPLN pair
has been quite stable in the last dozen or so weeks," Rogalski
said, adding that its slight weakening on Thursday was in
reaction to the dollar's recovery.
    Investors will scrutinize NBP governor Adam Glapinski's
comments during a press conference scheduled later on Thursday
for hints on when the bank could resume easing.
    A Reuters poll on Thursday showed the Polish currency as
likely running out of room for further gains after hitting
multi-year highs and seen leading losses among central Europe's
currencies in the coming six months.
    In Hungary, the forint  EURHUF=  also eased 0.1% to 406.35
per euro.
    A Budapest-based trader also pointed to the firming dollar,
adding that the forint was following the zloty.
    "On Wednesday the forint broke through the level of 406.25
which is a very important level, and this shows that there could
be scope for more strengthening. However, the industrial
production data in the morning is not helping the forint."
    Hungary's industrial output fell by an annual 5.3% in
December based on preliminary unadjusted data, Central
Statistics Office (KSH) said on Thursday, compared to a 2.4%
drop expected by analysts.    
    
 CEE MARKETS SNAPSHOT AT  1133 CET                            
 
 
 CURRENCIES            Latest    Previous   Daily    Change in
                       trade     close      change   2025
                                                     
 Czech       EURCZK=    25.1140    25.1390   +0.10%     +0.38%
 crown                                               
 Hungary     EURHUF=   406.3500   406.1500   -0.05%     +1.25%
 forint                                              
 Polish      EURPLN=     4.2040     4.2000   -0.10%     +1.73%
 zloty                                               
 Romanian    EURRON=     4.9765     4.9764   -0.00%     +0.00%
 leu                                                 
 Serbian     EURRSD=   117.0300   117.0300   +0.00%     -0.07%
 dinar                                               
 Note: daily change calculated from 1800 CET                  
 
 
 
 
 
 
 STOCKS                Latest    Previous   Daily    Change in
                                 close      change   2025
                                                     
 Prague      .PX        1893.68  1856.7800   +1.99%     +7.59%
 Budapest    .BUX      85807.36   84192.98   +1.92%     +8.17%
 Warsaw      .WIG20     2442.48    2394.72   +1.99%    +11.43%
 Bucharest   .BETI     17125.32   17080.62   +0.26%     +2.42%
 
 
 
 
 BONDS                 Yield     Yield      Spread   Daily
                       (bid)     change     vs Bund  change in
                                                     spread
                                                     
                                                     
 Czech Rep                                       s  
 Czech Rep                                       s  
 Czech Rep                                      s  
                                                              
 Poland                                          s  
 Poland                                          s  
 Poland                                         s  
 
 
 
 
 
 
 
 
 FORWARD RATE          3x6       6x9        9x12     3M
 AGREEMENTS                                          interbank
 Czech Rep   CZKFRA        3.62       3.48     3.40       3.83
             PRIBOR=                                 
 Hungary     HUFFRA        6.88       6.70     6.52       6.50
             BUBOR=                                  
 Poland      PLNFRA        5.80       5.47     5.05       5.84
             WIBOR=                                  
 Note: FRA quotes are for ask prices                          
 
 
 
 (Reporting by Karol Badohal in Warsaw, Anita Komuves in
Budapest and Jason Hovet in Prague; Editing by Alexander Smith)
 ((karl.badohal@thomsonreuters.com;))
 
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