FX move sideways, PFNonwovens drops after poor Q2

BUDAPEST/PRAGUE, Aug 22 (Reuters) - Central Europe's
currencies moved sideways on Thursday as markets looked for
clarity over the U.S. interest rate outlook, while shares in
Czech artificial textile maker PFNonwovens fell to a
4-1/2-year low after a poor second quarter.
PFNonwoven shares were the biggest mover in Prague, losing
more than 3% to underperform a 0.4% gain in the Prague
index after the company posted a 74% fall in second-quarter net
profit and said full-year earnings before interest, tax,
depreciation and amortisation (EBITDA) would likely fall on the
low end of its guidance.
Regional currency markets lacked direction in morning trade
ahead of a Friday meeting of officials from central banks in
Jackson Hole, Wyoming.
A scheduled speech by Federal Reserve Chair Jerome Powell is
of particular interest after last week's inversion of the U.S.
yield curve - widely regarded as a signal of recession - boosted
expectations the Fed would lower interest rates at its September
policy meeting.
On Wednesday, minutes of the Federal Reserve's July meeting
showed policymakers were deeply divided over whether to cut
interest rates, but united in wanting to signal they were not on
a preset path to more easing.
"If Powell cannot fulfil the market's ambitious
expectations, central European currencies including the crown
will again come under pressure at the end of the week," CSOB
analysts said.
The Hungarian forint hovered around the 327.5 per
euro mark, a key level, which has so far prevented further
weakening in the region's worst-performing currency, which has
lost nearly 2% of its value versus the euro this year.
David Nemeth, an economist at K&H Bank in Hungary, said if
market pessimism strengthened in the next days, the forint could
approach levels around the 330 mark, within a whisker of its
all-time-lows.
"For now, however, there are no apparent reasons for the
forint to trade beyond the 330 level for a sustained period,"
Nemeth said in a note.
The National Bank of Hungary meets next Tuesday to discuss
interest rates.
Last month the NBH left rates unchanged and affirmed its
accommodative stance, saying data since its June policy meeting
confirmed its view of an expected decline in inflation from the
end of this year.
CEE MARKETS SNAPSHOT AT 0958 CET
CURRENCIES
Latest Previous Daily Change
bid close change in 2019
EURCZK= Czech 25.7950 25.8070 +0.05% -0.34%
crown
EURHUF= Hungary 327.5000 327.4900 -0.00% -1.96%
forint
EURPLN= Polish 4.3560 4.3509 -0.12% -1.52%
zloty
EURRON= Romanian 4.7250 4.7220 -0.06% -1.50%
leu
EURHRK= Croatian 7.3825 7.3813 -0.02% +0.37%
kuna
EURRSD= Serbian 117.6800 117.8100 +0.11% +0.53%
dinar
Note: calculated from 1800
daily CET
change

Latest Previous Daily Change
close change in 2019
.PX Prague 1042.50 1037.9800 +0.44% +5.67%
.BUX Budapest 39778.11 39648.21 +0.33% +1.63%
.WIG20 Warsaw 2109.20 2105.88 +0.16% -7.35%
.BETI Bucharest 9129.64 9144.33 -0.16% +23.65
%
.SBITOP Ljubljana 864.47 863.18 +0.15% +7.49%
.CRBEX Zagreb 1880.32 1881.46 -0.06% +7.52%
.BELEX15 Belgrade 751.98 752.80 -0.11% -1.27%
.SOFIX Sofia 578.82 579.56 -0.13% -2.63%
BONDS
Yield Yield Spread Daily
(bid) change vs Bund change
in
Czech spread
Republic
CZ2YT=RR 2-year 1.0970 0.0220 +197bp +2bps
s
CZ5YT=RR 5-year 0.7850 0.0060 +169bp +0bps
s
CZ10YT=R 10-year 1.0320 0.0190 +169bp +1bps
R s
Poland
PL2YT=RR 2-year 1.5390 -0.0220 +242bp -3bps
s
PL5YT=RR 5-year 1.7720 0.0330 +267bp +3bps
s
PL10YT=R 10-year 2.0210 0.0710 +268bp +6bps
R s
FORWARD RATE AGREEMENT
3x6 6x9 9x12 3M
interba
nk
Czech Rep <PR 2.09 1.87 1.69 2.14
IBOR=>
Hungary <BU 0.32 0.33 0.34 0.27
BOR=>
Poland <WI 1.73 1.66 1.60 1.72
BOR=>
Note: FRA are for ask prices
quotes
**********************************************************
****

(Reporting by Gergely Szakacs and Jason Hovet, Editing by Angus
MacSwan)


2019-08-22 10:26:10

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