Markets will watch later on Thursday a news conference of Polish Governor Adam Glapinski, who previously has said he hoped the first interest rate cut would be possible at the end of the year, but would depend on how much inflation eased. Data on Thursday showed Czech inflation slowed to its lowest in a year in April to a headline rate of 12.7%, possibly taking pressure off a central bank that came close last week to even renewing rate hikes that have been on hold since last year. The Czech crown dropped 0.1% to 23.4900 against the euro at 0904 GMT. A two-year interest rate swap fell as much as 25 basis points. "The CPI print definitely plays to the cards of doves in (the central bank) board," a Prague-based rates trader said. The Czech National Bank voted 4-3 last week to keep rate stability, although a growing minority supported a further hike to the base rate of 7.00%, which is the highest in over two decades. Also this week, Hungary's CPI slowed from 25.7% in March to 24.0% in April, below expectations, with core inflation receding to 24.8% from 25.7%. Analysts said this signalled chances of a rate cut by the central bank in its 18% one-day deposit rate. "The absence of a negative surprise supports the likelihood of a first cut at the May rate meeting," Erste Bank analysts wrote in a note.
The Hungarian forint on Wednesday managed to break the 370 threshold against the euro all the way down to 369.4, its strongest position since April 2022. The forint pulled back to trade at 370.9 at 0904 GMT on Thursday.
Inflation in central Europe has been stronger than in the euro zone, with Hungary's price growth above 20% since September 2022, leading to the tightest monetary policy in Europe, with a base rate set at 13%. Poland's central bank left its main interest rate on hold at 6.75% on Wednesday, maintaining its view that slowing growth will help curb inflation as price growth looks to have peaked.
Romania's central bank also kept interest rates unchanged.
The Polish zloty hovered at 4.5265 against the
euro, slightly weaker on the day, and Romania's leu also backtracked a touch.
CEE SNAPSHO AT
MARKETS T 1104
CET
CURRENC
IES
Latest Previou Daily Change s
bid close change in 2023
EURCZK Czech <EURCZK 23.4950 23.4620 -0.14% +2.82%
= crown =>
EURHUF Hungary <EURHUF 370.900 369.700 -0.32% +7.69%
= forint => 0 0
EURPLN Polish <EURPLN 4.5265 4.5190 -0.17% +3.60%
= zloty =>
EURRON Romanian <EURRON 4.9295 4.9250 -0.09% +0.26%
= leu =>
EURRSD Serbian <EURRSD 117.230 117.270 +0.03% +0.06%
= dinar => 0 0
Note: calcula 1800
daily ted CET
change from
Latest Previou Daily Change s
close change in 2023
.PX Prague 1388.28 1389.99 -0.12% +15.52
00 %
.BUX Budapest 46204.6 46252.7 -0.10% +5.51%
9 2
.WIG20 Warsaw <.WIG20 1940.52 1931.94 +0.44% +8.29%
>
.BETI Buchares 12167.9 12176.4 -0.07% +4.33%
t 8 6
.SBITO Ljubljan <.SBITO 1216.51 1209.37 +0.59% +15.99
P a P> %
.BELEX Belgrade <.BELEX 913.91 913.91 +0.00% +10.83
15 15> %
.SOFIX Sofia <.SOFIX 623.07 621.67 +0.23% +3.59%
>
Yield Yield Spread Daily
(bid) change vs Bund change
in
Czech spread
Republic
CZ2YT= 2-year <CZ2YT= 5.5240 -0.1680 +288bp -19bps
RR RR> s
CZ5YT= 5-year <CZ5YT= 4.8740 -0.1930 +263bp -21bps
RR RR> s
CZ10YT <CZ10YT 4.4510 -0.1300 +216bp -13bps
=RR 10-year =RR> s
Poland
PL2YT= 2-year <PL2YT= 5.7520 -0.0220 +310bp -4bps
RR RR> s
PL5YT= 5-year <PL5YT= 5.7290 -0.0340 +348bp -5bps
RR RR> s
PL10YT <PL10YT 5.7840 -0.0210 +349bp -2bps
=RR 10-year =RR> s
FORWARD
3x6 6x9 9x12 3M interba nk Czech <CZKFRA 7.20 6.71 6.15 7.18 Rep ><PRIBO
R=>
Hungary <HUFFRA 14.55 12.87 11.68 16.19 ><BUBOR
=>
Poland <PLNFRA 6.78 6.45 6.04 6.90 ><WIBOR
=>
Note: are for
FRA ask
quotes prices
***********************************
***************************
(Reporting by Boldizsar Gyori in Budapest, additional reporting
by Jason Hovet in Prague and Karol Badohal in Warsaw; Editing by
Shilpi Majumdar)
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