CEE MARKETS-Hungarian forint weakens on poor Q2 GDP data, zloty firms

    By Anita Komuves
    BUDAPEST, Aug 17 (Reuters) - Central European currencies
were mixed with the Hungarian forint sliding more than half a
percent on Monday as investors reacted to a plunge in economic
activity in the region caused by the coronavirus pandemic.
    The forint was trading 0.55% down at 348.30 per
euro.
    "The forint is being hit because of the weak GDP number from
Friday," an FX trader in Budapest said. "The jump in public debt
does not look good, either."
    Hungary's GDP dropped by 13.6% year-on-year, the worst in
the region, in the second quarter. The country's public debt
jumped to 71.9% of GDP as the pandemic hit, the central bank
said on Monday.
    Elsewhere, the Polish zloty firmed 0.31% to 4.3870
per euro. The currency was helped by a better-than-expected,
8.2% annual drop in GDP in the second quarter, an FX trader in
Warsaw said.
    Higher-than-expected inflation could put the Hungarian
forint and the Polish zloty under pressure and makes investors
closely watch communication by the Hungarian (NBH) and Polish
(NBP) central banks, analysts say.  
    "Medium-term risks for the zloty still remain: a monetary
policy that is possibly too expansionary in the long run on the
backdrop of current inflation rates," Commerzbank said. 
    Poland's central bank is due to release July net inflation
data at 1200 GMT. 
    The NBP has cut rates three times, to 0.1%, this year and
launched large-scale bond purchases. 
    Investors will also be eyeing the NBH's steps, Commerzbank
said, because "while the slump in growth argues for a continued
expansionary or even more expansionary monetary policy, rising
inflation rates tend to require a restrictive signal".
    Headline inflation in Hungary accelerated to an annual 3.8%
in July. The NBH targets 3% headline inflation with a tolerance
band of a percentage point on either side.
    The bank is holding its next rate-setting meeting on Aug.
25. The NHB cut its base rate in June and July by a total of 30
basis points, to 0.6%, and started a bond-buying programme.
    Elsewhere, the Romanian leu and the Czech crown
 were little moved. 
    
                     CEE      SNAPSHO   AT                      
                     MARKETS  T        1111 CET           
                              CURRENC                           
                              IES                         
                              Latest   Previous  Daily    Change
                              bid      close     change   in
                                                          2020
 EURCZK=  Czech      <EURCZK  26.1120   26.1000   -0.05%  -2.60%
          crown      =>                                   
 EURHUF=  Hungary    <EURHUF  348.300  346.4000   -0.55%  -4.93%
          forint     =>             0                     
 EURPLN=  Polish     <EURPLN   4.3870    4.4008   +0.31%  -2.98%
          zloty      =>                                   
 EURRON=  Romanian   <EURRON   4.8335    4.8350   +0.03%  -0.94%
          leu        =>                                   
 EURHRK=  Croatian   <EURHRK   7.5300    7.5255   -0.06%  -1.12%
          kuna       =>                                   
 EURRSD=  Serbian    <EURRSD  117.480  117.6000   +0.10%   +0.08
          dinar      =>             0                          %
          Note:      calculated from             1800           
          daily                                  CET      
          change                                          
                                                                
                              Latest   Previous  Daily    Change
                                       close     change   in
                                                          2020
 .PX      Prague               911.80  913.0600   -0.14%  -18.27
                                                               %
 .BUX     Budapest            36489.9  36591.83   -0.28%  -20.82
                                    0                          %
 .WIG20   Warsaw     <.WIG20  1845.41   1856.56   -0.60%  -14.17
                     >                                         %
 .BETI    Bucharest           8749.59   8733.63   +0.18%  -12.31
                                                               %
 .SBITOP  Ljubljana  <.SBITO   863.84    860.69   +0.37%  -6.70%
                     P>                                   
 .CRBEX   Zagreb     <.CRBEX  1596.79   1602.57   -0.36%  -20.85
                     >                                         %
 .BELEX1  Belgrade   <.BELEX   666.49    667.27   -0.12%  -16.86
 5                   15>                                       %
 .SOFIX   Sofia      <.SOFIX   433.14    433.21   -0.02%  -23.76
                     >                                         %
                                                                
                              Yield    Yield     Spread   Daily
                              (bid)    change    vs Bund  change
                                                          in
          Czech                                           spread
          Republic                                        
 CZ2YT=R    2-year   <CZ2YT=   0.1410    0.0030   +080bp   +1bps
 R                   RR>                               s  
 CZ5YT=R    5-year   <CZ5YT=   0.6780   -0.0330   +132bp   -3bps
 R                   RR>                               s  
 CZ10YT=    10-year  <CZ10YT   0.9860   -0.0100   +141bp   -1bps
 RR                  =RR>                              s  
          Poland                                                
 PL2YT=R    2-year   <PL2YT=   0.1700    0.0050   +082bp   +1bps
 R                   RR>                               s  
 PL5YT=R    5-year   <PL5YT=   0.7230    0.0210   +136bp   +3bps
 R                   RR>                               s  
 PL10YT=    10-year  <PL10YT   1.3230    0.0210   +175bp   +3bps
 RR                  =RR>                              s  
                     FORWARD                                    
                              3x6      6x9       9x12     3M
                                                          interb
                                                          ank
          Czech Rep  <CZKFRA     0.33      0.33     0.43    0.34
                     ><PRIBO                              
                     R=>                                  
          Hungary    <HUFFRA     0.77      0.81     0.87    0.60
                     ><BUBOR                              
                     =>                                   
          Poland     <PLNFRA     0.23      0.23     0.24    0.23
                     ><WIBOR                              
                     =>                                   
          Note: FRA  are for ask                                
          quotes     prices                               
          **********************************************        
          ****************                                
 
 (Additional reporting by Alan Charlish in Warsaw, editing by Ed
Osmond)
  
 
 

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