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Forint hovers near 3-month-highs as U.S. inflation data buoys sentiment



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By Gergely Szakacs and Karol Badohal

BUDAPEST/WARSAW, May 16 (Reuters) -Hungary's forint EURHUF= hovered near 3-month-highs on Thursday after figures showing U.S. inflation slowed slightly more than expected in April, bolstering market sentiment.

At 0744 GMT the forint traded down 0.1% to 386 against the euro, near its strongest standing since early February. The currency hit that milestone earlier this week after Hungarian central bank Deputy Governor Barnabas Virag scaled back the outlook for rate cuts by the end of June.

Other central European currencies were marginally stronger, with a Budapest-based currency trader saying the assassination attempt on Slovakia's Prime Minister Robert Fico had no market impact for now and that sentiment was driven by U.S. data.

"The U.S. inflation figures have brought an absolutely positive mood to the market, with bond yields falling by 10 to 15 basis points," the trader said, adding that Thursday's Hungarian bond tenders could attract strong demand.

The U.S. data broke a three-month streak of hotter-than-expected readings that had sapped Federal Reserve policymaker confidence in a narrative of steadily easing price pressures.

Slovak leader Fico was in "very serious" but stable condition on Thursday, a hospital official said, after he was shot five times in an assassination attempt that laid bare deep political divisions in the country.

"We expect that the current situation will not destabilize the social or economic situation in the country. Slovakia is a democratic country, and the competencies of individual public officials are well defined," Erste Group said in a note.

"The primary task of public officials and democratic institutions will now be mainly to prevent further polarisation of society and to ensure the proper functioning of the state."

Shares in Magyar Telekom MTEL.BU rose 1.8% in early trade after the company reported an 18.7% rise in quarterly gross profit on Wednesday and said 2024 earnings before interest, taxes, depreciation and amortisation could grow by 20% to 25%.

The company's shares have gained 55% over the past six months, outperforming the Budapest benchmark index .BUX. Magyar Telekom had adopted a practice of adjusting its prices to the previous year's inflation rate, which was the highest in the European Union in Hungary last year.

Hungary's central bank, which holds its May policy meeting next Tuesday, has strongly criticised the practice of backward-looking pricing by services companies.

Later on Thursday, Poland will publish April core inflation data, which ING economists expect will show a decline to 4%, with an inflation-rebound looming later this year as the government unwinds cost-of-living support measures.

"In Poland, the central bank will publish an estimate of core inflation. The final numbers for April were confirmed yesterday at 2.4% year-on-year and we believe this is the last low print before rising again in the coming months, with 5.5% at the end of this year in our forecast," ING said in a note.

Santander Bank Polska analysts said there was a growing chance of a correction in the Polish zloty in the short term after recent strong gains lifted central Europe's most liquid currency to four-year highs.



CEE MARKETS

SNAPSHOT

AT 0944 CET






CURRENCIES







Latest

Previous

Daily

Change




bid

close

change

in 2024

EURCZK=

Czech crown

EURCZK=

24.6950

24.7200

+0.10%

+0.03%

EURHUF=

Hungary forint

EURHUF=

386.0000

385.5000

-0.13%

-0.73%

EURPLN=

Polish zloty

EURPLN=

4.2605

4.2640

+0.08%

+1.97%

EURRON=

Romanian leu

EURRON=

4.9750

4.9759

+0.02%

-0.01%


Note: daily change

calculated from


1800 CET












Latest

Previous

Daily

Change





close

change

in 2024

.PX

Prague

.PX

1558.96

1557.1700

+0.11%

+10.25%

.BUX

Budapest

.BUX

69070.00

65125.52

+6.06%

+13.94%

.WIG20

Warsaw

.WIG20

2570.49

2508.34

+2.48%

+9.71%

.BETI

Bucharest

.BETI

17201.79

16879.46

+1.91%

+11.91%













Spread

Daily






vs Bund

change in


Czech Republic





spread

CZ2YT=RR

2-year

CZ2YT=RR

4.0640

0.0050

+118bps

+2bps

CZ5YT=RR

5-year

CZ5YT=RR

3.9920

-0.0140

+155bps

+0bps

CZ10YT=RR

10-year

CZ10YT=RR

4.1060

-0.0080

+170bps

+1bps


Poland






PL2YT=RR

2-year

PL2YT=RR

5.3640

0.0120

+248bps

+2bps

PL5YT=RR

5-year

PL5YT=RR

5.5020

-0.0010

+306bps

+1bps

PL10YT=RR

10-year

PL10YT=RR

5.6390

-0.0060

+323bps

+1bps





Reporting by Gergely Szakacs; Editing by Janane Venkatraman

For related news and prices, click on the codes in brackets: All emerging market news EMRG CEEU CEE/ Spot FX rates Eastern Europe spot FX EEFX= Middle East spot FX MEFX= Asia spot FX ASIAFX= Latin America spot FX LATAMFX= Other news and reports World central bank news CEN Economic Data Guide ECONGUIDE Official rates GLOBAL/INT Emerging Diary EMRG/DIARY Top events M/DIARY Diaries DIARY Diaries Index IND/DIARY
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