The Polish central bank will decide on rates on Wednesday when all 14 respondents in a Reuters poll expect rates to stay unchanged. "We expect the NBP to leave its policy rate unchanged at +6.75%, in line with consensus expectations," Goldman Sachs said in a note. "We also expect the central bank to maintain its dovish guidance, with NBP President Adam Glapinski likely reiterating his hope that policy rates can be lowered this year." Polish inflation slowed to 14.7% in April from 16.1% in March and came in below expectations. By contrast, Hungary's headline annual inflation slowed marginally in March to 25.2% from 25.4%. Nonetheless, the Hungarian central bank last month cut the top of its interest rate corridor, opening the way for a potential lowering of its key 18% one-day deposit rate in the coming months. Investors will monitor April inflation data, due on Wednesday, for guidance on the timing of rate cuts.
Analysts in a Reuters poll expect the headline inflation to slow to 24.2%.
"An insignificant decrease to, let's say, 25.0% or 24.9% would mean sticky inflation and higher interest rates staying in place for longer, leading to a strengthening of the forint," one forex trader said, asking not to be named.
The forint was trading at 372.8 to the euro, easing 0.4% and moving away from the 370 threshold the currency has neared since the Hungarian central bank cut the top of rate corridor by 450 bps to 20.5% on April 25.
Czech markets were closed for holiday.
Meanwhile, Warsaw’s stock index gained 1.1%, while Budapest’s strengthened 0.1%. Polish oil company PKN Orlen's shares underperformed the Polish market, gaining 0.6% to trade at 63.4 zloty. The Financial Times reported the Russian oil ban costs PKN Orlen millions a day, citing the head of the company.
CEE SNAPSHOT AT
MARKETS 1141 CET
CURRENCI
ES
Latest Previous Daily Change
bid close change in 2023
Czech 23.4340 23.3920 -0.18% +3.09%
crown
Hungary 372.8500 371.5000 -0.36% +7.13%
forint
Polish 4.5640 4.5735 +0.21% +2.75%
zloty
Romanian 4.9249 4.9265 +0.03% +0.36%
leu
Serbian 117.2300 117.3000 +0.06% +0.06%
dinar
Note: calculated from 1800 CET
daily
change
Latest Previous Daily Change
close change in 2023
Prague 1390.45 1390.450 +0.00% +15.70%
0
Budapest 46372.01 46330.72 +0.09% +5.89%
Warsaw 1932.93 1912.37 +1.08% +7.86%
Bucharest 12256.15 12185.92 +0.58% +5.08%
Ljubljana 1224.46 1230.04 -0.45% +16.75%
Zagreb 2246.39 2238.95 +0.33% +754.89
%
Belgrade <.BELEX15 910.39 905.82 +0.50% +10.40%
>
Sofia 613.91 613.91 +0.00% +2.06%
Yield Yield Spread Daily
(bid) change vs Bund change
in
Czech spread
Republic
2-year <CZ2YT=RR 6.0100 -0.0100 +336bps -4bps
>
5-year <CZ5YT=RR 5.0570 -0.0070 +280bps -3bps
>
10-year <CZ10YT=R 4.5780 0.0040 +227bps -2bps
R>
Poland
2-year <PL2YT=RR 5.7700 0.0000 +312bps -3bps
>
5-year <PL5YT=RR 5.7920 -0.0090 +353bps -3bps
>
10-year <PL10YT=R 5.8310 0.0010 +352bps -2bps
R>
FORWARD
3x6 6x9 9x12 3M
interban
k
Czech Rep < 7.27 6.84 6.09 7.18
PRIBOR=>
Hungary < 14.70 12.87 11.68 16.20
BUBOR=>
Poland < 6.79 6.45 6.04 6.90
WIBOR=>
Note: FRA are for ask prices
quotes
**************************************************
************
(Reporting by Boldizsar Gyori, additional reporting by Karol
Badohal in Warsaw; editing by Barbara Lewis)
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