Forint adds to gains as higher-than-expected CPI cools rate cut bets
By Anita Komuves
BUDAPEST, Aug 9 (Reuters) -Central European currencies strengthened against the euro on Friday, with the Hungarian forint leading the gains due to continued support from higher-than-expected July inflation data that dampened rate cut expectations, analysts said.
The forint EURHUF= was 0.23% stronger versus the euro, building on its gains in the previous session following the release of last month's consumer price data and the posting of a budget surplus that also exceeded market expectations.
"After (CPI) data were published, the forint started to strengthen as rate cut expectations were lowered," brokerage Equilor said in a note.
Hungary's headline inflation rose to an annual 4.1% in July, and core inflation accelerated to 4.7%, Thursday's data showed.
"Still, the market is pricing in at least three cuts or even a little more than that with a chance we could see some movement this month," ING wrote in a note.
"That said, our economists say the inflation numbers do not strongly point to a rate cut in August and see room for only two more reductions this year."
The National Bank of Hungary cut its borrowing costs HUINT.ECI= by 25 basis points (bps) to 6.75% in July.
Elsewhere, the Czech crown EURCZK= added 0.22% and was trading at 25.219 to the euro while the Polish zloty EURPLN= was little moved at 4.3235 versus the common currency.
Most stocks in the region were higher, with Budapest's equities index adding 0.25%.
Hungary's OTP Bank OTPB.BU outperformed the wider market and was up 0.33% by 0901 GMT after the company reported a 268 billion forint ($740 million) consolidated profit after tax for the second quarter, slightly above analyst expectations.
Hungarian energy company MOL MOLB.BU added 0.15% by 0906 GMT after it posted a quarterly net profit of 165 billion forints ($455.6 million) and reiterated its 2024 guidance.
CEE MARKETS | SNAPSHOT | AT 1132 CET | ||||
CURRENCIES | ||||||
Latest | Previous | Daily | Change | |||
trade | close | change | in 2024 | |||
EURCZK= | Czech crown | EURCZK= | 25.2190 | 25.2740 | +0.22% | -2.05% |
EURHUF= | Hungary forint | EURHUF= | 395.3000 | 396.2000 | +0.23% | -3.06% |
EURPLN= | Polish zloty | EURPLN= | 4.3245 | 4.3270 | +0.06% | +0.46% |
EURRON= | Romanian leu | EURRON= | 4.9769 | 4.9775 | +0.01% | -0.05% |
EURRSD= | Serbian dinar | EURRSD= | 116.9300 | 117.0200 | +0.08% | +0.27% |
Note: daily change | calculated from | 1800 CET | ||||
Latest | Previous | Daily | Change | |||
close | change | in 2024 | ||||
.PX | Prague | .PX | 1560.91 | 1553.7000 | +0.46% | +10.39% |
.BUX | Budapest | .BUX | 72105.77 | 71925.82 | +0.25% | +18.95% |
.WIG20 | Warsaw | .WIG20 | 2281.69 | 2264.10 | +0.78% | -2.62% |
.BETI | Bucharest | .BETI | 17870.06 | 17880.22 | -0.06% | +16.26% |
Spread | Daily | |||||
vs Bund | change in | |||||
Czech Republic | spread | |||||
CZ2YT=RR | 2-year | CZ2YT=RR | 3.4650 | -0.0110 | +106bps | -1bps |
CZ5YT=RR | 5-year | CZ5YT=RR | 3.5160 | 0.0210 | +136bps | +3bps |
CZ10YT=RR | 10-year | CZ10YT=RR | 3.7410 | -0.0140 | +149bps | +1bps |
Poland | ||||||
PL2YT=RR | 2-year | PL2YT=RR | 4.9160 | 0.0710 | +251bps | +7bps |
PL5YT=RR | 5-year | PL5YT=RR | 5.0070 | -0.0690 | +285bps | -6bps |
PL10YT=RR | 10-year | PL10YT=RR | 5.1950 | -0.0970 | +295bps | -8bps |
FORWARD RATE AGREEMENTS | ||||||
3x6 | 6x9 | 9x12 | 3M interbank | |||
Czech Rep | CZKFRAPRIBOR= | 3.90 | 3.52 | 3.32 | 4.43 | |
Hungary | HUFFRABUBOR= | 6.70 | 6.22 | 5.78 | 6.55 | |
Poland | PLNFRAWIBOR= | 5.68 | 5.36 | 4.90 | 5.85 | |
Note: FRA quotes | are for ask prices | |||||
************************************************************** | ||||||
($1 = 362.1600 forints)
Reporting by Anita Komuves;
Editing by Helen Popper
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