CEE MARKETS-Czech crown near lows ahead of expected rate cut

Komercni Banka as

08/02/2024 09:55

WARSAW, Feb 8 (Reuters) - The Czech crown stood near a
21-month low on Thursday ahead of an expected rate cut decision
by the central bank, while other Central European currencies
held largely flat.
    Analysts polled by Reuters were split on the scale of
expected policy easing by the Czech National Bank (CNB) later in
the day, with a slim majority leaning towards a moderate 25
basis-point trim to 6.50%, while markets were pricing in a 50
basis-point cut.
    By 0857 GMT the Czech crown  EURCZK=  steadied against the
euro at 24.97, after briefly slipping past the 25 per euro level
for a second time this week. On Monday the currency hit 25.03,
its weakest level since May 2022.
    "The near-term performance will be affected by the CNB
decision: a cut by 50 basis points may send the crown above
25.00 vs. euro in the next few days, while a cut by 25 basis
points may calm the market and the crown could firm a bit," said
Generali Investments CEE chief economist Radomir Jac, who
expected a 25 basis-point cut.
    Markets will also be waiting for the CNB's comments and new
quarterly macro forecast, he added.
    In Prague, Komercni Banka  BKOM.PR  shares jumped over 5%
after the lender lifted its dividend payout. The stock was on
course for its biggest one-day jump since October 2022.
    The Hungarian forint  EURHUF=  took a breather after
retreating for four straight sessions, and was flat at 388.15
per euro.
    "Hungary's forint will be influenced today by the
preliminary budget data ... which investors will eye to gauge
whether the widening of Hungary's budget deficit continued into
the new year," Equilor analyst Zoltan Arokszallasi said.
    He added that sentiment could be influenced by any
government reaction to the European Union's decision to launch
an infringement procedure over Hungary's so-called 'sovereignty
protection law', passed on Tuesday.
    The ruling Fidesz party says the law is needed to defend
against undue political interference from abroad. The European
Commission said on Wednesday that it violated EU law.
    The Polish zloty  EURPLN=  held flat in the middle of its
range of recent weeks, after ratesetters kept borrowing costs
steady on Wednesday, with the central bank governor scheduled to
speak in the afternoon.
    "The zloty will probably remain stable around the level of
4.34 per EUR and the statements of the National Bank of Poland
governor during today's press conference should remain market
neutral," Bank Millennium wrote in a note.
    
            CEE        SNAPSHOT   AT                         
            MARKETS              0957 CET            
                       CURRENCI                              
                       ES                            
                       Latest    Previous  Daily     Change
                       trade     close     change    in 2024
 Czech       EURCZK=    24.9680   24.9750    +0.03%    -1.07%
 crown                                               
 Hungary     EURHUF=   388.1500  388.3000    +0.04%    -1.28%
 forint                                              
 Polish      EURPLN=     4.3430    4.3405    -0.06%    +0.03%
 zloty                                               
 Romanian    EURRON=     4.9760    4.9761    +0.00%    -0.03%
 leu                                                 
 Serbian     EURRSD=   117.1100  117.1400    +0.03%    +0.12%
 dinar                                               
 Note:      calculated from                1800 CET          
 daily                                               
 change                                              
                                                             
                       Latest    Previous  Daily     Change
                                 close     change    in 2024
 Prague      .PX        1462.05  1444.470    +1.22%    +3.40%
                                        0            
 Budapest    .BUX      64353.40  64345.88    +0.01%    +6.16%
 Warsaw      .WIG20     2341.23   2347.31    -0.26%    -0.08%
 Bucharest   .BETI     15748.70  15726.44    +0.14%    +2.46%
                                                             
                                           Spread    Daily
                                           vs Bund   change
                                                     in
 Czech                                               spread
 Republic                                            
   2-year                                           
   5-year                                           
   10-year                                         
 Poland                                                      
   2-year                                           
   5-year                                           
   10-year                                         
            FORWARD                                          
                       3x6       6x9       9x12      3M
                                                     interban
                                                     k
 Czech Rep   CZKFRA <      5.28      4.20      3.61      6.51
            PRIBOR=>                                 
 Hungary     HUFFRA <      7.37      5.97      5.63      9.14
            BUBOR=>                                  
 Poland      PLNFRA <      5.78      5.52      5.19      5.85
            WIBOR=>                                  
 Note: FRA  are for ask prices                               
 quotes                                              
 **************************************************          
 ************                                        
 
 (Reporting by Karol Badohal in Warsaw, Boldizsar Gyori in
Budapest and Jason Hovet in Prague; Editing by Kevin Liffey)
 ((karl.badohal@thomsonreuters.com))
 
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