CEE MARKETS-Czech crown on back foot as markets eye rate cut
02/02/2024 10:11
By Alan Charlish
WARSAW, Feb 2 (Reuters) - The Czech crown EURCZK= was
slightly weaker in Friday morning trade as markets looked ahead
to a central bank meeting next week after two top policymakers
voiced support for a bigger rate cut than the one delivered in
December.
The market has expected a debate on Feb. 8 for either a 25-
or 50-basis-point reduction in the main interest rate, which the
bank first cut by 25 basis points to 6.75% last month.
Deputy Governor Jan Frait told Reuters in an interview that
he was prepared to back at least a 50-basis-point cut at the
bank board's policy meeting and may favour an even larger move.
Meanwhile, Czech National Bank (CNB) board member Tomas
Holub told Bloomberg that policymakers could consider
accelerating the pace of interest rate cuts as inflation ebbs to
"relatively standard" levels.
At 0946 GMT, the crown was 0.11% weaker against the euro at
24.883.
"The Czech crown weakened during this week, as two top
officials from the CNB... declared their support for an interest
rate cut of 50 basis points," said Radomir Jac, chief economist
at Generali Investments CEE.
"The Czech currency may remain a bit nervous in the days
before the CNB interest rate decision, which will be the key
event in the Czech market during the next week."
Elsewhere, currencies were moving sideways as markets looked
ahead to payrolls data from the United States that could shed
light on when the Federal Reserve will start cutting rates.
The Polish zloty EURPLN= was 0.06% weaker at 4.3135 and
the Hungarian forint EURHUF= was 0.04% stronger at 382.60.
Economists expect the U.S. economy added 180,000 new jobs in
January, which would be a slowdown from December and perhaps
begin to make a case for Federal Reserve interest rate cuts
sooner rather than later.
"We have a recovery in expectations for Fed rate cuts and
this is generally positive for CEE currencies, I expect this to
be the driving factor for the whole CEE space in the coming
days," said Piotr Poplawski, senior economist at ING Bank
Slaski.
Stock markets were higher, with Poland's WIG 20 .WIG20
index rising 1.49% and Prague's PX index rising 0.14% to its
highest since February 2022.
CEE SNAPSHOT AT
MARKETS 1046 CET
CURRENCI
ES
Latest Previous Daily Change
bid close change in 2024
EURCZK= Czech
EURHUF= Hungary %
EURPLN= Polish
EURRON= Romania
EURRSD= Serbian %
Note: calculat 1800
daily ed from CET
change
Latest Previous Daily Change
close change in 2024
.PX Prague .PX 1460.46 1458.360 +0.14 +3.28%
0 %
.BUX Budapes .BUX 65311.76 65320.88 -0.01% +7.74%
t
.WIG20 Warsaw .WIG20 2340.37 2306.07 +1.49 -0.11%
%
.BETI Buchare .BETI 15698.66 15621.43 +0.49 +2.13%
st %
Spread Daily
vs change
Bund in
Czech spread
Republi
c
CZ2YT=R ps
CZ5YT=R ps
CZ10YT= ps
Poland
PL2YT=R ps
PL5YT=R ps
PL10YT= ps
FORWARD
3x6 6x9 9x12 3M
interban
k
Czech CZKFRA 5.43 4.22 3.46 6.55
Rep
Hungary HUFFRA 7.29 5.71 5.25 9.20
BUBOR=
Poland PLNFRA 5.67 5.28 4.93 5.86
WIBOR=
Note: are for
FRA ask
quotes prices
*************************************
*************************
(Reporting by Alan Charlish in Warsaw and Jason Hovet in
Prague; editing by Christina Fincher)
((alan.charlish@thomsonreuters.com;))
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