Views Article – Sharenet Wealth

Europe, Forex

Currencies mixed, stocks up on China’s export rebound

WARSAW, Aug 8 (Reuters) – The forint firmed on Thursday after Hungary reported a drop in inflation in line with forecasts, while central European shares tracked global stocks higher on relief over a rebound in Chinese exports and a steadying of the yuan. Hungarian headline inflation slowed to 3.3% in July from 3.4% in June after hitting a seven-year-high of 3.9% in May, supporting the central bank’s policy of leaving interest rates unchanged in view of an expected decline in inflation. The central bank’s closely watched core inflation figure adjusted for tax changes also slowed to 3.2% in July from 3.5% in June. “It supports the National Bank of Hungary’s wait-and-see stance and maybe market players have started to stop betting against the National Bank of Hungary and are closing some short positions,” said Peter Virovacz, senior economist at ING Hungary. By 0857 GMT the forint had firmed 0.27% against the euro to be bid at 325.03. The Czech crown was a shade weaker at 25.776 while the Polish zloty was stable at 4.306. The Czech unemployment rate rose to 2.7% of the workforce in July from 2.6% in June, the Labour Ministry said on Thursday, growth which was in line with analysts’ forecasts. Stocks in the region rose on improved global risk appetite, with Poland’s blue-chip WIG 20 index gaining 1.3% and Prague’s PX index rising 1.0%. China’s exports unexpectedly returned to growth in July on improved global demand, buoying global stock markets which had been hit by turmoil centred around an escalation of U.S.-China trade tensions. Czech 10-year government bond yields rose 6 basis points to 1.019%, while Polish 10-year yields rose over 2 basis points to 2.039%. Poland is holding a bond switch auction on Thursday. “The auction, apart from the Bund weakening, can be a trigger for a yield rebound on the Polish market,” Santander Bank Polska analysts said in a note. CEE SNAPSHOT AT MARKETS 1141 CET CURRENCI ES Latest Previous Daily Change bid close change in 2019 Czech 25.7780 25.7620 -0.06% -0.28% crown Hungary 324.9000 326.2100 +0.40% -1.17% forint Polish 4.3223 4.3221 -0.00% -0.76% zloty Romanian 4.7315 4.7295 -0.04% -1.64% leu Croatian 7.3800 7.3810 +0.01% +0.41% kuna Serbian 117.5500 117.6700 +0.10% +0.64% dinar Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2019 Prague 1026.92 1015.700 +1.10% +4.09% 0 Budapest 40436.97 40283.52 +0.38% +3.32% Warsaw 2161.90 2138.23 +1.11% -5.04% Bucharest 9102.06 9064.84 +0.41% +23.27% Ljubljana 858.24 861.63 -0.39% +6.71% Zagreb 1897.74 1899.52 -0.09% +8.52% Belgrade <.BELEX15 739.84 740.86 -0.14% -2.87% > Sofia 584.12 579.12 +0.86% -1.74% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=RR 0.9440 0.0070 +179bps -1bps > 5-year <CZ5YT=RR 0.7900 0.0420 +162bps +3bps > 10-year <CZ10YT=R 1.0190 0.0610 +159bps +5bps R> Poland 2-year <PL2YT=RR 1.5620 0.0010 +241bps -1bps > 5-year <PL5YT=RR 1.8290 0.0180 +266bps +1bps > 10-year <PL10YT=R 2.0390 0.0260 +261bps +1bps R> FORWARD RATE AGREEMEN T 3×6 6×9 9×12 3M interban k Czech Rep < 2.07 1.86 1.70 2.15 PRIBOR=> Hungary < 0.29 0.31 0.33 0.25 BUBOR=> Poland < 1.74 1.72 1.69 1.72 WIBOR=> Note: FRA are for ask prices quotes ************************************************** ************ (Reporting by Alan Charlish, additional reporting by Jan Lopatka; Editing by Kirsten Donovan)

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