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Views Article – Sharenet Wealth

Europe, Forex

Assets mixed on trade war fears, Hungary slowdown

By Marton Dunai BUDAPEST, Aug 7 (Reuters) – Emerging European stocks gained on Wednesday benefiting from a Western European rebound but currencies traded flat, as lingering worries about the Sino-U.S. trade war and signs of a slowdown in Hungary weighed on markets. Shares in Asia fell for an eighth straight session on Wednesday, but losses and nerves were soothed somewhat by White House assurances that it wants to press ahead with negotiations. European shares rose on Wednesday after three sessions of losses as deal-making activity in the chemical sector helped offset pale earnings from banks in the region. Hungarian, Czech and Polish assets mostly treaded water in early trading, as investors waited for cues from any change in risk appetite in core markets. The zloty may follow a lacklustre session on Tuesday with some strengthening, Santander said in a note to clients. “As long as there is no information fuelling the risk aversion, in our view the zloty could gain and catch up with other currencies of our region” In Hungary, weaker than expected industry output data added to recent signs of an economic slowdown, something Prime Minister Viktor Orban has said may prompt several new stimulus programmes. June output showed contraction both on a monthly and an annual basis. “Today’s data rounds out the second-quarter figures which shows the slowing of overall growth together with retail sales data,” ING analyst Peter Virovacz wrote in a note. “All signs indicate the first quarter was the peak and the economy is slowing down now.” Hungary’s economic growth tied a 19-year high of 5.3% year-on-year in the first quarter. Aside from economic challenges, the region also faces political changes later this year, with general elections in Poland and a municipal vote in Hungary. The Polish president’s office has confirmed the country will hold its parliamentary election on Oct. 13, which most pollsters expect the ruling Law and Justice (PiS) party to win thanks to generous social spending and robust economic growth. Hungary will hold municipal elections on the same day, watched more closely than normal for signs of any change in the overwhelming dominance of Prime Minister Viktor Orban’s Fidesz party, unbroken for more than a decade. CEE SNAPSHOT AT MARKETS 0955 CET CURRENCI ES Latest Previous Daily Change bid close change in 2019 Czech 25.7450 25.7410 -0.02% -0.15% crown Hungary 325.3800 325.0200 -0.11% -1.32% forint Polish 4.3175 4.3166 -0.02% -0.65% zloty Romanian 4.7310 4.7299 -0.02% -1.63% leu Croatian 7.3810 7.3825 +0.02% +0.39% kuna Serbian 117.5900 117.6500 +0.05% +0.60% dinar Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2019 Prague 1026.22 1022.850 +0.33% +4.02% 0 Budapest 40323.44 40037.39 +0.71% +3.03% Warsaw 2170.60 2156.23 +0.67% -4.66% Bucharest 9103.70 9047.79 +0.62% +23.29% Ljubljana 858.12 868.21 -1.16% +6.70% Zagreb 1900.49 1897.97 +0.13% +8.67% Belgrade <.BELEX15 764.90 763.78 +0.15% +0.42% > Sofia 579.64 579.95 -0.05% -2.49% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=RR 1.1590 0.1740 +199bps +18bps > 5-year <CZ5YT=RR 0.9760 0.0470 +179bps +6bps > 10-year <CZ10YT=R 1.0360 -0.0090 +159bps +1bps R> Poland 2-year <PL2YT=RR 1.5600 -0.0010 +239bps +1bps > 5-year <PL5YT=RR 1.8400 -0.0120 +265bps +0bps > 10-year <PL10YT=R 2.0890 0.0000 +265bps +2bps R> FORWARD RATE AGREEMEN T 3×6 6×9 9×12 3M interban k Czech Rep < 2.09 1.92 1.76 2.15 PRIBOR=> Hungary < 0.31 0.33 0.36 0.26 BUBOR=> Poland < 1.73 1.72 1.70 1.72 WIBOR=> Note: FRA are for ask prices quotes ************************************************** ************ (Reporting by Marton Dunai Editing by Alexandra Hudson)


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