off-the-wire

CEE MARKETS-Forint hits 5-week low in SVB fallout, stocks get slight relief

Kitco Media
By Reuters
Published:
Updated:
Reuters
By Jason Hovet and Krisztina Than PRAGUE, March 14 (Reuters) - Hungary's forint slumped to a five-week low before regaining some session losses on Tuesday, while the Czech crown also hit its lowest since early February, with markets staying nervous after the collapse of Silicon Valley Bank last week. Markets were hit hard on Monday after the failure of SVB and New York's Signature Bank over the weekend even after the U.S. government took steps to shore up systemic confidence. The market rout undid weeks of gains for central Europe's currencies and cut much of the rise seen so far in 2023 that had pushed currencies to multi-month or multi-year highs. The forint , after trading at its highest since April 2022 at below 380 to the euro to start March, was on the retreat again on Tuesday, creeping toward the big psychological level of 400. It was traded at 395.75, down 0.7% on the day, at 0921 GMT, and has fallen over 3% in the past two days. "We cannot see a positive reversal of this today," Equilor analysts said. "In the short term the chart shows (the euro) is overbought but we can see an important resistance only at the levels round 399-400."


The forint has the added pressure of a bubbling policy dispute between the Hungarian central bank and government, with the latter wanting policy easing as the economy weakens. Hungary's base rate is the highest in the European Union as the bank battles inflation that is hovering above 20%. Fears of a potential banking crisis after SVB's collapse caused global markets to scale back expectations of U.S. rate hikes, which would impact policy outlooks in central Europe, where rate setters are holding steady now after sharp hiking cycles in 2021-2022. Elsewhere, the Polish zloty eased 0.2% and stock markets were mixed but drifting mostly after banking stocks took a heavy hit on Monday. The Czech crown , which had touched a nearly 15-year high earlier in March, was at a five-week low on Tuesday, trading 0.4% lower on the day at 23.835 to the euro. Czech retail sales slipped for a ninth consecutive month in January, data showed, as high inflation continued to hit consumer demand. Markets were also tuned to U.S. inflation data later in the day, while the European Central Bank will meet on Thursday. Bond yields remained at one-month lows in the Czech Republic and Poland after a large drop on Monday, tracking core rates.


"Today, EUR rates have dropped notably on the front end even as some ECB representatives expressed willingness to carry on with hiking," Komercni Banka trader Marek Lesko said. "Any large surprise in the US CPI released today might add more fire to the extreme market volatility."


CEE SNAPSHO AT


MARKETS T 1021


CET


CURRENC


IES


Latest Previou Daily Change s


bid close change in 2023 EURCZK Czech <EURCZK 23.8350 23.7400 -0.40% +1.36% = crown =>
EURHUF Hungary <EURHUF 395.750 393.100 -0.67% +0.93% = forint => 0 0
EURPLN Polish <EURPLN 4.6930 4.6845 -0.18% -0.07% = zloty =>
EURRON Romanian <EURRON 4.9235 4.9185 -0.10% +0.39% = leu =>
EURHRK Croatian <EURHRK 7.5330 7.5365 +0.05% +0.05% = kuna =>
EURRSD Serbian <EURRSD 117.200 117.300 +0.09% +0.09% = dinar => 0 0


Note: calculated from 1800


daily CET


change



Latest Previou Daily Change s


close change in 2023 .PX Prague 1351.12 1346.18 +0.37% +12.43 00 % .BUX Budapest 41723.9 41797.8 -0.18% -4.73% 2 1
.WIG20 Warsaw <.WIG20 1742.39 1753.30 -0.62% -2.77% >
.BETI Buchares 12256.5 12255.1 +0.01% +5.08% t 7 9
.SBITO Ljubljan <.SBITO 1184.45 1184.09 +0.03% +12.93 P a P> % .BELEX Belgrade <.BELEX 895.14 894.45 +0.08% +8.55% 15 15>
.SOFIX Sofia <.SOFIX 624.24 625.09 -0.14% +3.78% >



Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic
CZ2YT= 2-year <CZ2YT= 5.6070 -0.2300 +287bp -26bps RR RR> s
CZ5YT= 5-year <CZ5YT= 4.9850 -0.0450 +262bp -8bps RR RR> s
CZ10YT <CZ10YT 4.6200 -0.0020 +230bp -4bps =RR 10-year =RR> s


Poland
PL2YT= 2-year <PL2YT= 5.9820 -0.0450 +325bp -8bps RR RR> s
PL5YT= 5-year <PL5YT= 6.0690 0.0770 +370bp +4bps RR RR> s
PL10YT <PL10YT 6.1090 0.0940 +379bp +6bps =RR 10-year =RR> s


FORWARD


3x6 6x9 9x12 3M interba nk Czech <CZKFRA 7.13 6.83 6.24 7.20 Rep ><PRIBO


R=>


Hungary <HUFFRA 14.95 13.27 12.07 16.29 ><BUBOR


=>


Poland <PLNFRA 6.82 6.55 6.06 6.92 ><WIBOR


=>


Note: are for ask


FRA prices


quotes



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(Reporting by Jason Hovet in Prague, Krisztina Than in Budapest, and Anna Wlodarczak-Semczuk in Warsaw; Editing by Krishna Chandra Eluri)


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