CEE MARKETS-Czech crown drops after bigger-than-expected rate cut

Komercni Banka as

08/02/2024 14:29

(Updates after Czech rate cut, adds comment on forint)
       WARSAW, Feb 8 (Reuters) - The Czech crown fell about
half a percent to hit a fresh 21-month low on Thursday after a
bigger-than-expected rate cut by the central bank, while the
forint firmed following the release of data showing a budget
surplus for January.
    The Czech National Bank cut its main repo rate by 50 basis
points to 6.25%, a bigger reduction than many in the market had
expected. It follows an initial 25 basis point reduction in
December.
    The crown  EURCZK=  fell as low as 25.12 to the euro, its
weakest since May 2022, before settling at 25.095 by 1342 GMT.
    Raiffeisen analyst Vratislav Zamis said the crown's move
reflected split views on the anticipated size of the bank's cut,
with a slight majority in a Reuters poll expecting a tamer move.
    "We expect another rate cut of a similar size or bigger at
the March meeting," he added.
    Czech forward rate agreements dropped some 20 basis points
at the shorter end after the decision.
    Markets will also be waiting for the central bank's updated
quarterly macro forecast, due later in the session.
    On stock markets, Komercni Banka  BKOM.PR  shares jumped
around 5% after the Czech lender lifted its dividend payout,
putting it on track for its biggest one-day jump since October
2022.
    The Hungarian forint  EURHUF=  recovered its footing after
falling for four straight sessions, firming by 0.2% to 387.5 per
euro.
    "Hungary's forint was influenced today by the preliminary
budget data showing surplus for January... this calmed
investors' worries about the state of the budget," Equilor
analyst Zoltan Arokszallasi said.
    The Polish zloty  EURPLN=  traded flat, in the middle of its
range of recent weeks, after rate setters kept borrowing costs
steady on Wednesday.
    
                  CEE      SNAPSH   AT                   
                  MARKETS  OT      1442            
                                   CET             
                           CURREN                        
                           CIES                    
                           Latest  Previo  Daily   Change
                                   us              
                           bid     close   change  in
                                                   2024
 EURCZK  Czech                0       0          
                                                   -1.11%
                                                   
                                                   
                                                   
                                                   
                                                   
                                                   
                                                   
 EURPLN  Polish                               %       %
 EURRON  Romania                                 
 EURRSD  Serbian             00      00       %       %
         Note:    calcula                  1800          
         daily    ted                      CET     
         change   from                             
                                                         
                           Latest  Previo  Daily   Change
                                   us              
                                   close   change  in
                                                   2024
 .PX     Prague    .PX     1459.6  1444.4   +1.05   +3.23
                                9     700       %       %
 .BUX    Budapes   .BUX    64441.  64345.   +0.15   +6.30
         t                     21      88       %       %
 .WIG20  Warsaw   <.WIG20  2318.8  2347.3  -1.21%  -1.03%
                  >             1       1          
 .BETI   Buchare   .BETI   15740.  15726.   +0.09   +2.40
         st                    53      44       %       %
                                                         
                                           Spread  Daily
                                           vs      change
                                           Bund    in
         Czech                                     spread
         Republi                                   
         c                                         
 CZ2YT=                                     ps  
 CZ5YT=                                     ps  
 CZ10YT                                    ps  
         Poland                                          
 PL2YT=                                     ps  
 PL5YT=                                     ps  
 PL10YT                                    ps  
                  FORWARD                                
                           3x6     6x9     9x12    3M
                                                   interb
                                                   ank
         Czech                                  
         Hungary                                 
         Poland                                  
         Note:    are for ask                            
         FRA      prices                           
         quotes                                    
         ****************************************        
         **********************                    
 

 (Reporting by Karol Badohal in Warsaw, Boldizsar Gyori in
Budapest and Jason Hovet in Prague; Editing by Kevin Liffey and
Christina Fincher)
 ((karl.badohal@thomsonreuters.com))
 
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