CEE MARKETS-Forint hits nine-month high as c.banker says June rate hike possible
17/05/2021 10:07
May 17 (Reuters) - The Hungarian forint EURHUF= hit a
nine-month high on Monday after the deputy governor of the
central bank said that from June it will adjust short-term rates
proactively to tackle rising inflation risks. urn:newsml:reuters.com:*:nL5N2N419I
Hungary, the Czech Republic and Poland all saw inflation
spike outside their central banks' target zones in April, but
previously only the Czech central bank had been tipped by
markets to hike interest rates this year. urn:newsml:reuters.com:*:nL1N2MY0XZ
"This will be a data-driven process, in several steps...and
the possibility of a hike in the base rate is worth assessing
already in June," Barnabas Virag told reporters.
At 0821 GMT the forint was 0.73% firmer against the euro at
352.80.
A Budapest-based fixed income dealer said long-end bond
yields went up 5 basis points, while short-end yields went up 15
basis points.
"The central bank took markets by surprise... in that we now
expect some form of a tightening cycle, not a single hike. How
much they will hike, that's the million dollar question," the
dealer said.
The Hungarian central bank has consistently said it has no
foreign exchange goal but it would fight inflation proactively.
Takarekbank economist Gergely Suppan said that forward rate
agreements (FRAs) were pricing in that the base rate, currently
at 0.6%, would probably be moved in line with the one-week
deposit rate, which is currently 0.75%. The one-week deposit
rate is expected to rise to 0.9% by next month, Suppan said.
The Polish zloty EURPLN= and the Czech crown EURCZK=
were both a touch firmer, strengthening 0.06% and 0.05%
respectively.
In Poland, the government on Saturday presented its "Polish
Deal" economic programme, promising lower taxes for most, higher
healthcare spending and help to buy homes. urn:newsml:reuters.com:*:nL8N2N1400
"This programme is undoubtedly aimed at people with
relatively lower incomes, which should favour consumption
growth," Bank Millennium analysts said in a note.
Poland's WIG 20 .WIG20 index was up 1.11%. The main
indices in Prague .PX and Budapest .BUX were up 0.39% and
0.22% respectively.
"The most recent economic plan will affect companies exposed
to retail demand such as Dino / Jeronimo Martins / Eurocash /
Allegro," said Ipopema analyst Robert Maj.
Shares in Allegro ALEP.WA rose over 4.5%, the biggest
gainers on the WIG 20.
CEE SNAPSHO AT
MARKETS T 1021
CET
CURRENC
IES
Latest Previou Daily Change
s
bid close change in 2021
EURCZK Czech
EURHUF Hungary 0 0
EURPLN Polish
EURRON Romanian
EURHRK Croatian
EURRSD Serbian 0 0
Note: calcula 1800
daily ted CET
change from
STOCKS
Latest Previou Daily Change
s
close change in 2021
.PX Prague .PX 1126.16 1121.81 +0.39% +9.64%
00
.BUX Budapest .BUX 45531.1 45429.1 +0.22% +8.13%
8 2
.WIG20 Warsaw <.WIG20 2116.03 2092.80 +1.11% +6.66%
>
.BETI Buchares .BETI 11621.3 11593.4 +0.24% +18.52
t 8 9 %
.SBITO Ljubljan <.SBITO 1079.04 1074.68 +0.41% +19.78
P a P> %
.CRBEX Zagreb <.CRBEX 1939.30 1940.04 -0.04% +11.50
> %
.BELEX Belgrade <.BELEX 761.62 759.38 +0.29% +1.74%
15 15>
.SOFIX Sofia <.SOFIX 523.40 522.39 +0.19% +16.95
> %
BONDS
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
FRA
3x6 6x9 9x12 3M
interba
nk
Czech
Hungary
Poland
Note: FRA quotes
are for ask
prices
***********************************
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(Reporting by Alan Charlish in Warsaw, Marton Dunai in Budapest
and Anna Banacka in Gdansk; editing by Emelia Sithole-Matarise)
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