Currencies, stocks rebound as markets take a breather ahead of Fed

Currencies, stocks rebound as markets take a breather ahead of Fed

21 Mar    Finance News, PMN Business, REU

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BUDAPEST — Central European

currencies firmed and stocks rebounded on Tuesday as global

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sentiment improved after the rescue of troubled lender Credit

Suisse by its Swiss rival UBS, with shares in Hungary’s

OTP jumping 3.1% in early trade.

Hungary’s forint, which hit an 11-week low on

Monday past 400 to the euro, was trading at 392 to the euro,

rising 1.07% and outperforming its peers.

“The forint’s exchange rate reversed (its retreat) above the

200-day moving average … with an improvement in international

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sentiment coming at the best possible time,” brokerage Equilor

said in a note. “Today’s trading also looks exciting with

volatility remaining above average.”

The Hungarian central bank holds a tender for short-term

discount bills on Tuesday, where it is offering 1 trillion

forints worth of bills as part of its efforts to drain

forint liquidity from the market. It is also holding FX swap

tenders offering euro liquidity to banks.

The bank has maintained an 18% quick deposit rate since last

October, when the forint hit record lows beyond 434 to the euro.

Its base rate of 13% is also the highest in the European Union,

with annual inflation running at 25.4% in February.

Apart from watching news related to the bank sector in

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Europe, investors are also looking forward to this week’s

meeting of the U.S. Federal Reserve.

Investors will be watching to see “whether the tensions in

the banking system would prevent further rate hikes,” said

analysts at Magyar Bankholding in a note.

The Polish zloty also firmed, by 0.2% to 4.6965 to

the euro, along with the Czech crown.

Analysts at Commerzbank said the zloty could have more room

to firm this year as inflation is expected to decline.

“The Polish inflation trend looks set to turn more benign

over the coming quarters as it has done in the Czech Republic

(Hungary remains an exception in the hawkish direction),”

Commerzbank said.

“This in turn supports our view that the zloty could

appreciate by the end of this year, other disruptive market

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factors permitting.”

Stock markets across the region gained on Tuesday, with

Warsaw’s WIG 20 index rising 1.3% and Budapest up

1.6% by 0833 GMT.

Prague’s index, which on Monday hit a two-month low, was

also up 1.3%, benefiting from improved sentiment. Shares in

utility CEZ rose, but underperformed, after 2022

earnings indicated a record dividend. Profits this year are set

to fall.

CEE SNAPSHO AT

MARKETS T 0933

CET

CURRENC

IES

Latest Previou Daily Change

s

bid close change in 2023

EURCZK Czech

EURHUF Hungary 0 0

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EURPLN Polish

EURRON Romanian

EURHRK Croatian

EURRSD Serbian 0 0

Note: calculated from 1800

daily CET

change

Latest Previou Daily Change

s

close change in 2023

.PX Prague 1341.90 1324.55 +1.31% +11.66

00 %

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.BUX Budapest 41988.5 41343.6 +1.56% -4.12%

1 2

.WIG20 Warsaw <.wig20>

.BETI Buchares 12142.8 12053.5 +0.74% +4.11%

t 8 9

.SBITO Ljubljan <.sbito p a> %

.CRBEX Zagreb <.crbex> 7%

.BELEX Belgrade <.belex>

.SOFIX Sofia <.sofix>

Yield Yield Spread Daily

(bid) change vs Bund change

in

Czech spread

Republic

CZ2YT= 2-year s

CZ5YT= 5-year s

CZ10YT s

Poland

PL2YT= 2-year s

PL5YT= 5-year s

PL10YT s

FORWARD

3×6 6×9 9×12 3M

interba

nk

Czech

Hungary

Poland

Note: are for ask

FRA prices

quotes

********************************************

******************

(Reporting by Krisztina Than in Budapest, and Pawel Florkiewicz

in Warsaw; editing by Mark Potter)

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