Forint outperforms, Czech rate hike bets fade

* Forint is buoyed by monetary tightening expectations
* Crown is off 12-day high; rate hike bets are reduced
* Budapest stocks set record high as OTP Bank rise further

By Sandor Peto
BUDAPEST, March 19 (Reuters) - The forint tested
10-month highs on Tuesday, buoyed by expectations that the
National Bank of Hungary ill tighten policy for the first time
in seven years next week.
The forint was up 0.1 percent against the euro
at 313.75 by 0919 GMT.
"The forint is lifted by expectations that the NBH will
increase the bottom of its rate corridor slightly next week,"
one Budapest-based currency dealer said.
Expectations for NBH tightening, fuelled by a rise in core
inflation, has helped the forint rise 2.3 percent
from beyond 320 late last year, making it the region's best
performer in 2019.
Czech markets have cut bets on another rate increase on
March 28, a day after the NBH's meeting and a day before
Britain's scheduled departure from the European Union.
Forward rate agreements indicate only a slim chance of a
Czech rate increase next week, a view reinforced on Tuesday by
Czech central bank Vice-Governor Marek Mora, who said he saw
zero to one rate hikes in 2019 as most likely.
The Czech crown was flat at 25.621 versus the
euro, off a 12-day high reached in early trade.
The zloty was weaker against the euro at 4.292,
but still near six-week highs it set in overnight trade,
unaffected by a higher-than-expected 7.6 percent annual rise in
Polish corporate wages.
"We see headwinds from the global side for the next month,
but then see a modest recovery in global economy, which should
aide the PLN together with the still-solid performance of the
domestic Polish economy," Danske Bank said in a weekly note on
emerging markets.
Equities gained in the region. Budapest's blue-chip index
hit another record high, driven by OTP Bank.

CEE SNAPSHOT AT
MARKETS 1019 CET
CURRENCI
ES
Latest Previous Daily Change
bid close change in 2019
Czech <EURCZK= 25.6120 25.6150 +0.01% +0.37%
crown >
Hungary <EURHUF= 313.7500 314.0000 +0.08% +2.34%
forint >
Polish <EURPLN= 4.2920 4.2896 -0.06% -0.06%
zloty >
Romanian <EURRON= 4.7560 4.7551 -0.02% -2.14%
leu >
Croatian <EURHRK= 7.4155 7.4156 +0.00% -0.07%
kuna >
Serbian <EURRSD= 117.7400 118.0350 +0.25% +0.48%
dinar >
Note: calculated from 1800 CET
daily
change

Latest Previous Daily Change
close change in 2019
Prague 1081.13 1076.730 +0.41% +9.59%
0
Budapest 42276.90 42085.01 +0.46% +8.02%
Warsaw 2354.20 2345.84 +0.36% +3.41%
Bucharest 7888.72 7883.39 +0.07% +6.84%
Ljubljana <.SBITOP 872.83 872.83 +0.00% +8.53%
>
Zagreb 1773.70 1774.12 -0.02% +1.42%
Belgrade <.BELEX1 711.39 717.34 -0.83% -6.60%
5>
Sofia 586.36 586.02 +0.06% -1.36%
BONDS
Yield Yield Spread Daily
(bid) change vs Bund change
in
Czech spread
Republic
2-year <CZ2YT=R 1.8640 0.0800 +239bps +8bps
R>
5-year <CZ5YT=R 1.7980 0.0080 +217bps +0bps
R>
10-year <CZ10YT= 1.9260 0.0030 +184bps +0bps
RR>
Poland
2-year <PL2YT=R 1.6300 -0.0030 +216bps +0bps
R>
5-year <PL5YT=R 2.2330 0.0040 +260bps +0bps
R>
10-year <PL10YT= 2.8910 -0.0020 +281bps +0bps
RR>
FORWARD RATE AGREEMEN
T
3x6 6x9 9x12 3M
interban
k
Czech Rep 2.19 2.25 2.27 2.03
<PRIBOR=
>
Hungary 0.35 0.53 0.72 0.14

Poland 1.74 1.74 1.73 1.72

Note: FRA are for ask prices
quotes
*************************************************
*************

(Additional reporting by Jason Hovet in Prague, editing by
Larry King)



2019-03-19 12:44:19

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