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Views Article – Sharenet Wealth

Europe, Forex

CEE stocks gain on global optimism over Fed easing

WARSAW, July 12 (Reuters) – Central European currencies were little changed on Friday and regional stocks got a boost from overnight gains in Wall Street and Asia due to fresh optimism after Federal Reserve Chair Jerome Powell left the door open to interest rate cuts. By 0830 GMT, Prague gained most on the day with 0.5%, followed by Budapest with about 0.4% and Warsaw’s bluechip index with 0.1%. Prague was let higher by Utility CEZ, which rose 0.9% on rising European wholesale electricity prices, and Komercni Banka, which climbed 1.1% as it tracked western markets. CEZ has recently been weighed down by uncertainty over future nuclear projects. The government gave preliminary approval on Monday for a CEZ subsidiary to build a nuclear power station with state guarantees to help it secure cheaper financing. CEZ has resisted launching the multi-billion dollar project alone given high costs and unclear returns. The Hungarian forint firmed marginally to bid at 325.85, with analysts at Equilor saying that “based on the technical picture, there is still a good chance in the medium term for the forint to weaken to 327.50.” The Polish zloty traded virtually flat at 4.2690 per euro, together with the Romanian leu and the Czech crown. “A move in euro/zloty may be potentially caused by signals from the European economy,” analysts at mBank said. “In an environment of global monetary easing, in the next weeks the zloty should strengthen, like the majority of emerging market assets, with additional help from positive forecasts for the Polish economy.” Trading was thin before Eurozone industrial production data for May. Analysts have said it could be an important trigger for the European Central Bank to move further along the easing path. CEE SNAPSHOT AT MARKETS 1102 CET CURRENCIE S Latest Previous Daily Change bid close change in 2019 Czech <EURCZK= 25.6060 25.6010 -0.02% +0.39% crown > Hungary <EURHUF= 325.8500 325.9500 +0.03% -1.46% forint > Polish <EURPLN= 4.2690 4.2676 -0.03% +0.48% zloty > Romanian <EURRON= 4.7340 4.7339 -0.00% -1.69% leu > Croatian <EURHRK= 7.3897 7.3920 +0.03% +0.27% kuna > Serbian <EURRSD= 117.6300 117.7000 +0.06% +0.57% dinar > Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2019 Prague 1051.84 1047.070 +0.46% +6.62% 0 Budapest 40801.74 40739.42 +0.15% +4.25% Warsaw 2320.93 2316.95 +0.17% +1.95% Bucharest 9026.68 9024.03 +0.03% +22.25% Ljubljana <.SBITOP 890.40 888.32 +0.23% +10.71% > Zagreb 1884.93 1885.17 -0.01% +7.78% Belgrade <.BELEX1 754.94 755.58 -0.08% -0.89% 5> Sofia 583.46 583.45 +0.00% -1.85% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=R 1.4910 0.0280 +221bps +3bps R> 5-year <CZ5YT=R 1.3420 0.0310 +197bps +4bps R> 10-year <CZ10YT= 1.4690 0.0160 +173bps +1bps RR> Poland 2-year <PL2YT=R 1.5670 -0.0020 +229bps +0bps R> 5-year <PL5YT=R 1.9390 0.0270 +257bps +3bps R> 10-year <PL10YT= 2.3300 0.0440 +259bps +4bps RR> FORWARD RATE AGREEMEN T 3×6 6×9 9×12 3M interbank Czech Rep 2.17 2.07 1.95 2.17 <PRIBOR= > Hungary 0.30 0.39 0.49 0.25 Poland 1.75 1.74 1.72 1.72 Note: FRA are for ask prices quotes ************************************************** ************ (Reporting by Radu Marinas in Bucharest, Anna Wlodarczak-Semczuk in Warsaw and Jason Hovet in Prague; Editing by Edmund Blair)


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