UPDATE 1-CEE MARKETS-Forint eases slightly after central bank extends QE programme

  • 4/27/2021
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(Updates with cenbank decision, trader comments) By Jason Hovet and Anita Komuves PRAGUE/BUDAPEST, April 27 (Reuters) - The Hungarian forint eased slightly on Tuesday after the National Bank of Hungary (NBH) left interest rates unchanged, as expected, and extended its quantitative easing programme. The forint was still 0.24% up on the day, trading at 362.93 to the euro, outperforming its regional peers after a recent slide. The rate decision did not significantly move the forint as it was already anticipated and priced in, according to an FX trader in Budapest. The Hungarian currency has roller-coastered this year, dropping nearly 2% at one point in the past two weeks. Government bond yields were not immediately moved by the central bank"s announcement, a fixed-income trader said. "The QE programme reached 1.9 trillion forints last week, so the market was sure that they would extend it, which was in line with the bank"s communication as well," he said. The NBH extended its QE programme, saying it would next review the scheme once the stock of its bond purchases rises by another 1 trillion forints ($3.33 billion) to 3 trillion forints. Other central European currencies eased as the U.S. dollar hovered above its recent lows and risk appetite slackened ahead of a Federal Reserve policy decision this week. The Czech crown lost steam, dropping 0.35% to 25.940 to the euro. Markets expect the Czech central bank, which meets next week, could begin hiking interest rates later this year although the timing is still uncertain. Board member Vojtech Benda told Bloomberg news agency the bank was not likely to raise rates this year as much as assumed in its staff forecasts. The Polish zloty dipped 0.17% while Romania"s leu was flat. Warsaw markets were waiting for a Thursday ruling from the Court of Justice of the European Union over questions concerning claims banks may be able to make from clients if foreign currency mortgage contracts are cancelled. The issue, weighing on the zloty, could result in major losses for the banking sector, coming after thousands of Polish borrowers took out Swiss franc loans more than a decade ago. Warsaw"s WIG20 index dropped 0.22% on Tuesday. CEE SNAPSHO AT MARKETS T 1549 CET CURRENC IES Latest Previous Daily Change bid close change in 2021 EURCZK= Czech EURHUF= Hungary 0 % EURPLN= Polish EURRON= Romania EURHRK= Croatia % EURRSD= Serbian 0 % Note: calculated from 1800 daily CET change Latest Previous Daily Change close change in 2021 .PX Prague 1097.40 1095.200 +0.20 +6.84% 0 % .BUX Budapes 43434.5 43281.61 +0.35 +3.15% t 3 % .WIG20 Warsaw 2000.61 2005.10 -0.22% +0.84% .BETI Buchare 11298.8 11213.75 +0.76 +15.23 st 3 % % .SBITOP Ljublja <.SBITOP 1060.52 1063.41 -0.27% +17.72 na > % .CRBEX Zagreb 1899.59 1895.34 +0.22 +9.22% % .BELEX1 Belgrad <.BELEX1 770.28 770.34 -0.01% +2.89% 5 e 5> .SOFIX Sofia 521.65 519.88 +0.34 +16.56 % % Yield Yield Spread Daily (bid) change vs change Bund in Czech spread Republi c CZ2YT=R ps CZ5YT=R ps CZ10YT= ps Poland PL2YT=R ps PL5YT=R ps PL10YT= ps FORWARD 3x6 6x9 9x12 3M interba nk Czech 0.45 0.70 0.97 0.36 Rep Hungary 0.95 1.12 1.27 0.79 Poland 0.24 0.27 0.39 0.21 Note: are for ask FRA prices quotes ******************************************** ****************** (Reporting by Jason Hovet in Prague, Anita Komuves in Budapest and Alan Charlish in Warsaw; editing by Mark Heinrich)

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