CEE MARKETS-Forint, zloty firm ahead of EU summit, budget deal in focus

  • 12/10/2020
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BUCHAREST, Dec 10 (Reuters) - The Hungarian forint and Polish zloty firmed against the euro on Thursday ahead of a European Union summit where the two governments could reach an agreement to unblock an EU financial package, while other central European currencies were mixed. Poland and Hungary have been blocking the 1.8 trillion euro 2021-2027 EU budget and coronavirus recovery fund drawn up for the 27 member states because they oppose a condition linking the release of funds to rule-of-law standards. Officials said on Wednesday the countries had provisionally accepted an EU budget proposal from the bloc"s German presidency and were awaiting further approval from other skeptical member states at the two-day summit. "A final deal signed by all parties at the 2-day EU summit would allow further modest forint strengthening," Raiffeisen said in a note. "In case of the zloty ... further strengthening will likely be dependent mainly on global sentiment which remains key for the currency." By 1015 GMT, the zloty was up 0.1% against the euro and the forint 0.3% at 355.6900. Brokerage Equilor said the next support level for the forint was near 353.7. Elsewhere in the region, the Czech crown was flat versus the single currency, while the Romanian leu edged 0.1% lower on the day, weighed down by political uncertainty after a parliamentary election. Romania"s ruling National Liberal Party (PNL) will propose Finance Minister Florin Citu as the next prime minister, senior party officials decided on Wednesday. The centrist president is expected to call parties for consultations later this week. Markets were also awaiting a European Central Bank meeting where analysts expect fresh stimulus measures to be unveiled. "Waiting for these events effectively improved the investment sentiment in the previous days and weeks," Bank Millennium said in a research note. "Therefore, we do not expect today"s decisions to have a significant impact on sentiment, although they will certainly fit in with the current risk-on market strategy." Stocks were mixed, with Budapest"s index up 0.8% but Prague"s down 0.5% on the day. CEE SNAPSHO AT MARKETS T 1144 CET CURRENC IES Latest Previou Daily Change s bid close change in 2020 Czech Hungary 0 0 Polish Romanian Croatian Serbian 0 0 Note: calculated from 1800 daily CET change Latest Previou Daily Change s close change in 2020 Prague 985.43 990.330 -0.49% -11.67% 0 Budapest 40974.0 40675.8 +0.73% -11.09% 7 9 Warsaw 1991.54 1994.12 -0.13% -7.37% Buchares 9540.52 9532.93 +0.08% -4.38% t Ljubljan <.SBITOP 895.59 893.98 +0.18% -3.27% a > Zagreb 1762.65 1764.53 -0.11% -12.63% Belgrade <.BELEX1 712.87 714.33 -0.20% -11.08% 5> Sofia 435.62 437.44 -0.42% -23.33% Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year s 5-year s s Poland 2-year s 5-year s s FORWARD 3x6 6x9 9x12 3M interba nk Czech 0.38 0.47 0.60 0.35 Rep Hungary 0.72 0.74 0.76 0.75 Poland 0.23 0.25 0.26 0.22 Note: are for ask FRA prices quotes ********************************************* ***************** (Reporting by Luiza Ilie in Bucharest, Anita Komuves in Budapest, Jason Hovet in Prague and Alan Charlish in Warsaw; Editing by Krishna Chandra Eluri)

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