Polish inflation for January at an annual 17.2% came in slightly below analyst forecasts of 17.6%, data showed. The forint , which has gone from an unloved currency last year to this year's top performer in central Europe, was flat from late Tuesday levels, trading at 379.50 to the euro by 1007 GMT. It retreated slightly from highs of 377.50 hit earlier on Wednesday. The currency has firmed 5.7% this year supported by the Hungarian central bank's 18% one-day deposit rate which has attracted substantial fund flows into the forint, traders said. "In the past days some key option levels had been knocked out as people who had taken up those positions earlier had not anticipated the forint would strengthen this much," a trader in Budapest said. These technical factors were coupled with dollar weakening on Tuesday which supported emerging markets. Then the dollar rose on Wednesday in the wake of stubbornly high U.S. inflation data and tough talk on interest rates from Federal Reserve officials.
But the forint mostly held onto its gains.
"The forint trades around levels last seen in May 2022 ... and arrived to the next key level at around 377 to the euro," brokerage Equilor said in a note, adding a negative correction could be on the cards after the recent rally. The National Bank of Hungary, like other central banks in the region that carried out the biggest monetary policy tightening in Europe in 2021 and last year, has sought to keep its main rates on hold for now, with inflation still at high levels. In Hungary, January inflation rose to 25.7%. In Poland, the zloty firmed 0.4%, trading at 4.757 versus the euro.
"Investors, supported by recent positive data from the U.S. ... and hawkish statements from some Fed members, intensified expectations regarding the target level of interest rates in the ongoing monetary tightening cycle in the U.S.. We believe that today the dollar will slightly strengthen, maintaining negative pressure on the zloty," Bank Millenium said.
"However, the risk of breaking above PLN 4.80 per EUR has slightly decreased." On stock markets, bourses were moving sideways, or were just in positive territory. The Prague index touched a fresh nearly one-year high amid gains for CEZ , whose shares have jumped in February amid speculation over the government's potential restructuring of the majority state-owned utility. CEE SNAPSHO AT
MARKETS T 1102
CET
CURRENC
IES
Latest Previou Daily Change s
bid close change in 2023
EURCZK Czech <EURCZK 23.7130 23.7200 +0.03% +1.88%
= crown =>
EURHUF Hungary <EURHUF 379.550 379.500 -0.01% +5.24%
= forint => 0 0
EURPLN Polish <EURPLN 4.7575 4.7770 +0.41% -1.43%
= zloty =>
EURRON Romanian <EURRON 4.8988 4.8986 -0.00% +0.89%
= leu =>
EURHRK Croatian <EURHRK 7.5330 7.5365 +0.05% +0.05%
= kuna =>
EURRSD Serbian <EURRSD 117.300 117.305 +0.00% +0.00%
= dinar => 0 0
Note: calculated from 1800
daily CET
change
Latest Previou Daily Change s
close change in 2023
.PX Prague 1411.07 1410.37 +0.05% +17.42
00 %
.BUX Budapest 46283.0 46386.2 -0.22% +5.68%
0 2
.WIG20 Warsaw <.WIG20 1857.10 1852.67 +0.24% +3.63%
>
.BETI Buchares 12343.2 12284.3 +0.48% +5.83%
t 1 9
.SBITO Ljubljan <.SBITO 1189.16 1187.29 +0.16% +13.38
P a P> %
.BELEX Belgrade <.BELEX 869.08 869.08 +0.00% +5.39%
15 15>
.SOFIX Sofia <.SOFIX 603.58 609.91 -1.04% +0.35%
>
Yield Yield Spread Daily
(bid) change vs Bund change
in
Czech spread
Republic
CZ2YT= 2-year <CZ2YT= 5.6900 0.0080 +284bp +2bps
RR RR> s
CZ5YT= 5-year <CZ5YT= 4.9810 0.0260 +250bp +5bps
RR RR> s
CZ10YT <CZ10YT 4.7130 0.0430 +230bp +8bps
=RR 10-year =RR> s
Poland
PL2YT= 2-year <PL2YT= 6.1040 -0.1300 +326bp -12bps
RR RR> s
PL5YT= 5-year <PL5YT= 6.0410 -0.1440 +356bp -12bps
RR RR> s
PL10YT <PL10YT 6.0560 -0.1580 +365bp -12bps
=RR 10-year =RR> s
FORWARD
3x6 6x9 9x12 3M interba nk Czech <CZKFRA 7.18 7.01 6.53 7.20 Rep ><PRIBO
R=>
Hungary <HUFFRA 15.18 13.69 12.15 16.14 ><BUBOR
=>
Poland <PLNFRA 6.96 6.85 6.50 6.93 ><WIBOR
=>
Note: are for ask
FRA prices
quotes
********************************************
******************
(Reporting by Krisztina Than in Budapest and Jason Hovet and
Robert Muller in Prague; Alan Charlish in Warsaw Editing by Mark
Potter)
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