Market attention is now pointed at who may begin to cut rates first, although some policymakers in the region have pushed back at expectations of monetary easing coming soon as inflation stays elevated.
On Tuesday, Romania's central bank left its key rate unchanged at 7.00% without giving too many clues on the path ahead. It followed Hungarian and Czech meetings last week where rates also stayed on hold and central bank officials signalled they would stay high for some time. On Wednesday, Poland will round out the latest series of rate meetings in central Europe, where steady rates are in contrast to hikes caried out by major peers like the European Central Bank. The zloty , which has been stuck in place in recent trading and has trailed sharp gains by peers in the region, was steady at 4.68 to the euro at 0843 GMT. Any spark for the zloty will likely come on Thursday when the Polish central bank Governor Adam Glapinski will speak. Markets price in around 60 basis points in cuts by the end of the year. "The governor normally tends to be on the dovish side however it is hard to move current market expectations in an even more dovish direction, but at the same time it is hard to imagine any (central bank) support for the Polish zloty," ING said.
"The zloty unsuccessfully tested the 4.670 EUR/PLN level and is unlikely to get the impetus to go lower these days. Therefore, we expect it to remain in the 4.670-4.690 range." In Romania, the leu was also unmoved following Tuesday's rate call. The Czech crown and Hungarian forint each gained 0.2%, shaking off data showing economic weakness dragging. Hungary's industrial output fell deeper in February, the data showed, while Czech retail sales declined for a 10th straight month. With high inflation still high, and continuing to sap economies in the region, analysts have become more cautious on currency outlooks, seen in Reuters' April poll publshed on Wednesay. In it, analysts seee a modest 1% gain for the zloty over the next year, while the forint and crown should retreat slightly after strong gains already posted in 2023.
CEE SNAPSHO AT
MARKETS T 1043
CET
CURRENC
IES
Latest Previou Daily Change s
bid close change in 2023
EURCZK Czech <EURCZK 23.4200 23.4750 +0.23% +3.15%
= crown =>
EURHUF Hungary <EURHUF 376.800 377.700 +0.24% +6.01%
= forint => 0 0
EURPLN Polish <EURPLN 4.6800 4.6805 +0.01% +0.20%
= zloty =>
EURRON Romanian <EURRON 4.9320 4.9325 +0.01% +0.21%
= leu =>
EURRSD Serbian <EURRSD 117.240 117.295 +0.05% +0.05%
= dinar => 0 0
Note: calcula 1800
daily ted CET
change from
Latest Previou Daily Change s
close change in 2023
.PX Prague 1362.77 1362.86 -0.01% +13.40
00 %
.BUX Budapest 43991.0 43666.5 +0.74% +0.45%
2 2
.WIG20 Warsaw <.WIG20 1768.26 1773.53 -0.30% -1.33%
>
.BETI Buchares 12323.4 12293.6 +0.24% +5.66%
t 7 0
.SBITO Ljubljan <.SBITO 1197.13 1195.11 +0.17% +14.14
P a P> %
.BELEX Belgrade <.BELEX 885.35 885.72 -0.04% +7.37%
15 15>
.SOFIX Sofia <.SOFIX 612.24 611.31 +0.15% +1.79%
>
Yield Yield Spread Daily
(bid) change vs Bund change
in
Czech spread
Republic
CZ2YT= 2-year <CZ2YT= 5.7970 0.0400 +314bp +1bps
RR RR> s
CZ5YT= 5-year <CZ5YT= 5.0020 -0.0190 +271bp -5bps
RR RR> s
CZ10YT <CZ10YT 4.5970 -0.0290 +232bp -4bps
=RR 10-year =RR> s
Poland
PL2YT= 2-year <PL2YT= 6.0470 -0.1050 +339bp -14bps
RR RR> s
PL5YT= 5-year <PL5YT= 6.0300 -0.0110 +374bp -4bps
RR RR> s
PL10YT <PL10YT 6.0690 -0.0180 +379bp -3bps
=RR 10-year =RR> s
FORWARD
3x6 6x9 9x12 3M interba nk Czech <CZKFRA 7.15 6.76 6.08 7.18 Rep ><PRIBO
R=>
Hungary <HUFFRA 14.95 13.32 12.12 16.30 ><BUBOR
=>
Poland <PLNFRA 6.84 6.68 6.28 6.90 ><WIBOR
=>
Note: are for
FRA ask
quotes prices
***********************************
***************************
(Reporting by Jason Hovet in Prague, Gergely Szakacs in
Budapest and Alan Charlish in Warsaw; Editing by Rashmi Aich)
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