CEE MARKETS-Currencies ease as markets await Fed projections – Yahoo Finance

By Anita Komuves BUDAPEST, June 10 (Reuters) – Central European currencies eased and stocks were mixed on Wednesday morning ahead of the U.S. Federal Reserve’s first economic projections since the COVID-19 pandemic set off a recession in February. Fresh inflation data shed light on the effects of the pandemic in the CEE region where some countries had battled rising inflation before lockdown measures brought their economies to a virtual halt. Czech consumer prices rose 2.9% year-on-year in May, falling within the central bank’s target range. Hungarian headline inflation slowed to an annual 2.2% in May. The central bank targets 3% headline inflation with a tolerance band of a percentage point on either side. Slower inflation is better news for the forint because it means that the real interest rate is rising, a client note from Commerzbank said. “Whether or not the central bank will be able to raise rates after the departure of deputy governor Marton Nagy is a less pertinent concern in the medium-term because the situation for a rate hike is unlikely to arise,” they added. The Hungarian parliament held a confirmation hearing on Tuesday for Barnabas Virag, nominee for deputy governor of the central bank. Former Deputy Governor Nagy unexpectedly resigned last month, raising questions about the future direction of the bank’s monetary policy. The forint was stable, trading at 344.25 versus the euro at 0810 GMT. “The forint has been stuck at this level for a few days and outperforms regional peers slightly,” a Budapest-based currency trader said. “Hungary could come out of the crisis better than expected, and since the Polish rate cut the Hungarian interest rates could be considered high,” he added. Hungary’s central bank was the most dovish in the region until a rate hike on April 1. The Polish central bank unexpectedly cut rates for a third time on May 28 in a bid to help the coronavirus-hit economy. CEE SNAPSHOT AT MARKETS 1010 CET CURRENCIE S Latest Previous Daily Change bid close change in 2020 Czech 26.6000 26.5580 -0.16% -4.39% crown Hungary 344.2500 344.1800 -0.02% -3.81% forint Polish 4.4548 4.4465 -0.19% -4.45% zloty Romanian 4.8340 4.8330 -0.02% -0.95% leu Croatian 7.5690 7.5695 +0.01% -1.63% kuna Serbian 117.4500 117.5800 +0.11% +0.10% dinar Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2020 Prague 952.47 945.0800 +0.78% -14.62% Budapest 37836.21 37879.48 -0.11% -17.90% Warsaw 1828.93 1835.59 -0.36% -14.94% Bucharest 8828.71 8813.53 +0.17% -11.51% Ljubljana 870.98 865.24 +0.66% -5.93% Zagreb 1662.34 1658.32 +0.24% -17.60% Belgrade <.BELEX15 676.58 680.81 -0.62% -15.61% > Sofia 464.35 465.68 -0.29% -18.27% Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=RR 0.1730 0.0960 +079bps +10bps > 5-year <CZ5YT=RR 0.5230 -0.0410 +109bps -3bps > 10-year <CZ10YT=R 0.9660 0.0010 +129bps +2bps R> Poland 2-year <PL2YT=RR 0.2430 0.0020 +086bps +1bps > 5-year <PL5YT=RR 0.8440 0.0170 +142bps +2bps > 10-year <PL10YT=R 1.4060 0.0000 +173bps +2bps R> FORWARD 3×6 6×9 9×12 3M interban k Czech Rep < 0.30 0.34 0.39 0.34 PRIBOR=> Hungary < 0.79 0.75 0.70 0.90 BUBOR=> Poland < 0.24 0.25 0.28 0.27 WIBOR=> Note: FRA are for ask prices quotes *************************************************** *********** (Reporting by Anita Komuves in Budapest; Editing by Ramakrishnan M.)

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