BUCHAREST, Feb 23 (Reuters) - Central European shares tracked emerging market indices higher on Thursday, while currencies were on softer ground after
BUCHAREST, Feb 23 (Reuters) – Central European shares tracked emerging market indices higher on Thursday, while currencies were on softer ground after Federal Reserve minutes of its last policy meeting supported further interest rate hikes. By 1050 GMT, Budapest and Warsaw blue chip indices were up 1.0% on the day, while Prague’s and Bucharest’s rose 1.0% and 0.4%, respectively. U.S. policymakers said that curbing high inflation would be the key factor in how much further rates needed to rise, according to the minutes. The Polish zloty and Czech crown were 0.1% weaker against the euro. The zloty is central Europe’s worst performing currency, down 1.25% overall this year, weighed down by a funding stand-off with the European Union and weak economic data. The crown was holding around its 14-year highs, stuck around levels it has traded at for much of February. “Worsening global sentiment in connection to rates repricing in an upward direction in the United States is not playing into the hands of the crown, although the safe harbour effect is staying thanks to the central bank’s intervention commitment,” CSOB said. The Czech National Bank has kept a pledge to intervene to prevent sharp weakening since last May although it has been out of markets in recent times, according to its most recent data releases. The Romanian leu, supported by foreign interest in planned government bond tenders, was up 0.2% on the day. The Hungarian forint was down 0.2% against the euro at 381.5500. The strength of the dollar is generally negative for central Europe’s high-yield currencies. Hungary’s central bank holds an interest rate meeting on Feb. 28. The bank, which was at the forefront of aggressive interest rate tightening to curb decades of high inflation could take a wait-and-see approach with inflation still running above 20% and uncertainty over access to EU recovery funds. “The NBH appears to be serious about its hawkish tone, and in our view it will be a challenge for the market to start pricing in a central bank rate normalisation again,” ING Bank said in a research note. “On the other hand, in the interim, core rates should ease their pressure on the long end of the curve.” CEE SNAPSHO AT MARKETS T 1227 CET CURRENC IES Latest Previou Daily Change s bid close change in 2023 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 2023 Prague 1389.13 1376.52 +0.92% +15.59 00 % Budapest 45520.8 45063.4 +1.01% +3.94% 3 8 Warsaw 1815.58 1796.87 +1.04% +1.32% Buchares 12337.9 12283.6 +0.44% +5.78% t 4 3 Ljubljan <.SBITOP 1202.44 1187.52 +1.26% +14.65 a > % Zagreb 2177.34 2169.41 +0.37% +728.6 1% Belgrade <.BELEX1 885.19 877.73 +0.85% +7.35% 5> Sofia 617.08 616.37 +0.12% +2.59% 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 3×6 6×9 9×12 3M interba nk Czech 7.21 7.04 6.54 7.20 Rep Hungary 15.50 14.14 12.70 16.30 Poland 7.02 7.07 6.82 6.94 Note: are for ask FRA prices quotes ********************************************* ***************** (Reporting by Luiza Ilie in Bucharest, Jason Hovet in Prague, Gergely Szakacs in Budapest and Paweł Florkiewicz in Warsaw; Editing by Raissa Kasolowsky)
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