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Views Article – Sharenet Wealth

Europe, Forex

FX mixed ahead of central bankers’ US meeting, Czech bonds ease

BUCHAREST, Aug 21 (Reuters) – Central European currencies were mixed in thin volumes on Wednesday, mirroring the euro ahead of a key central bankers meeting in Wyoming on Friday, with the crown leading regional losses and Czech bond yields edging up for a fourth day running. Recovering from multi-year lows, Czech yields, the region’s lowest, were quoted at 1.017% by 0850 GMT, up 2.5 basis points on the day for the benchmark 10-year bond. “The crown continues to faithfully copy global market moods,” CSOB analysts said in a note, citing U.S. President Donald Trump’s latest China trade dispute comments, general uncertainty in the run-up to Friday’s Jackson Hole meeting and a fall of Italy’s government as the main drivers of sentiment. “Without significant domestic impulses, the crown will stay in a slightly negative mood,” CSOB added. During a White House visit by Romanian President Klaus Iohannis on Tuesday, Trump said the current U.S. standoff with China over trade was necessary, adding that China still wants to make a deal: “Somebody had to take China on.” Officials from major central banks will gather at Jackson Hole in Wyoming with markets focused on a scheduled speech by Federal Reserve Chair Jerome Powell. His comments are of particular interest after last week’s inversion of the U.S. yield curve – widely regarded as a signal of recession – boosted expectations the Fed would lower interest rates at its September policy meeting. The Czech central bank has paused a two-year tightening cycle since May and left the direction of its next move open. Central European bond yields have dropped steadily since May as the European Central Bank and U.S. Federal Reserve turned dovish in the face of slowing global trade. By 0900 GMT the crown eased 0.1% to 25.8 against the euro, while Romania’s leu traded at 4.728. The Polish zloty firmed 0.2% on the day to trade at 4.3504 and Hungary’s forint was flat. CEE SNAPSHOT AT 1036 MARKETS CET CURRENCI ES Latest Previous Daily Change bid close change in 2019 Czech 25.8000 25.7830 -0.07% -0.36% crown Hungary 327.4000 327.5400 +0.04 -1.93% forint % Polish 4.3528 4.3615 +0.20 -1.45% zloty % Romanian 4.7283 4.7268 -0.03% -1.57% leu Croatian 7.3835 7.3823 -0.02% +0.36% kuna Serbian 117.6700 117.6800 +0.01 +0.54% dinar % Note: calculated from 1800 daily CET change Latest Previous Daily Change close change in 2019 Prague 1039.93 1033.7400 +0.60 +5.41% % Budapest 39778.20 40005.90 -0.57% +1.63% Warsaw 2112.65 2110.11 +0.12 -7.20% % Bucharest 9090.35 9060.27 +0.33 +23.11 % % Ljubljana 863.67 866.50 -0.33% +7.39% Zagreb 1875.58 1875.95 -0.02% +7.25% Belgrade <.BELEX15 751.57 752.42 -0.11% -1.33% > Sofia 579.65 575.65 +0.69 -2.49% % BONDS Yield Yield Spread Daily (bid) change vs change Bund in Czech spread Republic 2-year <CZ2YT=RR 1.1450 0.0150 +204b +1bps > ps 5-year <CZ5YT=RR 0.7760 0.0160 +169b +0bps > ps 10-year <CZ10YT=R 1.0050 0.0120 +166b -2bps R> ps Poland 2-year <PL2YT=RR 1.5140 0.0030 +241b -1bps > ps 5-year <PL5YT=RR 1.7200 0.0580 +263b +4bps > ps 10-year <PL10YT=R 1.9300 0.0820 +259b +5bps R> ps FORWARD RATE AGREEMENT 3×6 6×9 9×12 3M interba nk Czech Rep < 2.08 1.84 1.66 2.14 PRIBOR=> Hungary < 0.31 0.32 0.33 0.26 BUBOR=> Poland < 1.72 1.65 1.59 1.72 WIBOR=> Note: FRA are for ask prices quotes ************************************************** ************ (Reporting by Radu Marinas in Bucharest, Jason Hovet in Prague and Alan Charlish in Warsaw; Editing by Mark Heinrich)


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