CEE MARKETS-Zloty weaker before inflation data, stocks pull back

  • 6/29/2021
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PRAGUE, June 29 (Reuters) - Central European stock markets eased on Tuesday, dragged down by global nerves that coronavirus outbreaks in Asia would hurt economic recoveries, while Poland"s zloty pulled back before a key inflation reading this week. The zloty was the biggest mover in the region as central European currencies paused after recent gains amid investor bets on rising interest rates. Markets will gauge a Polish flash inflation reading for June due on Wednesday to see if Poland"s central bank could take a more hawkish tone following interest rate hikes in Hungary and the Czech Republic this month. "In the coming days we can see a continuation ... towards the June (highs for the zloty), especially if Wednesday"s CPI reading revives speculation about tightening of monetary policy," Konrad Bialas, chief economist at DM TMS Brokers, said. For now, the zloty was stuck on the weak side of 4.50 to the euro - trading at 4.516 at 0949 GMT - and a dealer said that psychological level would provide resistance to further gains for now. Elsewhere, Hungary"s forint eased less than 0.1% and the Czech crown gained less than 0.1% in sideways trading. Central banks in both countries last week became the first in the European Union to return to interest rate hikes to tackle inflation rising at the fastest pace in the bloc. The moves come just over a year after the coronavirus pandemic forced rate setters into emergency cuts to cushion their economies. Poland"s inflation hit a rate of 4.6% in May, the second highest in the EU after Hungary, according to Eurostat. However, Poland"s central bank has stuck to a dovish tone. On stock markets, Warsaw blue chips led losses, falling 0.9%. Budapest and Prague also dropped, following global sentiment lower. Fears over the spread of the highly infectious Delta variant are denting sentiment at a time markets are on edge after the U.S. Federal Reserve shocked markets with a hawkish tilt this month. CEE SNAPSHO AT MARKETS T 1149 CET CURRENC IES Latest Previou Daily Change s bid close change in 2021 EURCZK Czech EURHUF Hungary 0 0 EURPLN Polish EURRON Romanian EURHRK Croatian EURRSD Serbian 0 0 Note: calcula 1800 daily ted CET change from STOCKS Latest Previou Daily Change s close change in 2021 .PX Prague 1160.39 1160.86 -0.04% +12.97 00 % .BUX Budapest 48166.4 48301.6 -0.28% +14.39 6 2 % .WIG20 Warsaw <.WIG20 2265.67 2285.81 -0.88% +14.20 > % .BETI Buchares 12017.9 11967.2 +0.42% +22.56 t 5 8 % .SBITO Ljubljan <.SBITO 1134.30 1135.79 -0.13% +25.91 P a P> % .CRBEX Zagreb <.CRBEX 1995.98 2001.56 -0.28% +14.76 > % .BELEX Belgrade <.BELEX 772.26 776.94 -0.60% +3.16% 15 15> .SOFIX Sofia <.SOFIX 553.90 556.14 -0.40% +23.77 > % BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic CZ2YT= 2-year s CZ5YT= 5-year s CZ10YT s Poland PL2YT= 2-year s PL5YT= 5-year s PL10YT s FRA 3x6 6x9 9x12 3M interba nk Czech Hungary Poland Note: FRA quotes are for ask prices *********************************** *************************** (Reporting by Jason Hovet in Prague and Alan Charlish in Warsaw; Editing by Edmund Blair)

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