CEE MARKETS-Forint firms after cenbank raises rates again

BY Reuters | ECONOMIC | 11/30/21 09:31 AM EST
    By Anita Komuves
    BUDAPEST, Nov 30 (Reuters) - The Hungarian forint firmed on
Tuesday after the central bank raised its collateralised loan
rate, widened its interest rate corridor and said it was
creating room to handle new financial market risks.
    The forint was up 0.53% and was trading at 366.05
per euro by 1347 GMT.
    The central bank raised its collateralised loan rate to 4.1%
from 3.05% and raised its overnight deposit rate to 1.6% from
1.15% at its scheduled non-rate-setting meeting.
    "The central bank has just told markets that it is ready for
more hikes, so the forint is up," an FX trader in Budapest said.
    "But the global mood needs to brighten for the forint to be
able to significantly strengthen."
    Some market players had expected the widening of the
interest rate corridor that makes room for further raises of the
one-week deposit rate that the bank sets every Thursday.
    Hungary's central bank raised its one-week deposit rate by
40 basis points to 2.9% last Thursday.
    Long-term Hungarian government bond yields fell about 10
basis points on Tuesday, after rising in the previous session as
the forint firmed and markets eyed further rate hikes, a
fixed-income trader in Budapest said.
    The yield on the 10-year bond was around 4.35%.
    The Polish zloty firmed 0.53% to 4.6600 versus
euro as data showed that Polish inflation jumped more than
expected in November, with the headline rate hitting a
two-decade high of 7.7%, fuelling hopes of tighter monetary
policy.
    The Czech crown was up 0.32% and was trading at
25.520 to the euro as third-quarter data showed that the economy
fared better than expected amid supply snags and falling
exports, with domestic demand boosting GDP by 1.5%
quarter-on-quarter.
    The Czech National Bank is ready to continue raising rates,
but not as sharply as it has done recently, Vice-Governor Marek
Mora was quoted as saying in an interview with the Frankfurter
Allgemeine Zeitung published on the bank's website.

    His comments come after Governor Jiri Rusnok told Reuters
last week that there was no rush for further hikes.
    Stock markets in the region were mixed, with Prague
losing 0.87%. Warsaw was 0.99% higher, while Budapest
 was down 0.46%.


                  CEE      SNAPSH   AT
                  MARKETS  OT      1447
                                   CET
                           CURREN
                           CIES
                           Latest  Previou  Daily   Change
                                   s
                           bid     close    hm      in 2021
 EURCZK  Czech    0                %
 EURHUF  Hungary  00        0       %
 EURPLN  Polish   %
 EURRON  Romania  EURHRK  Croatia  EURRSD  Serbian  00        0       %
         Note:    calculated from           1800
         daily                              CET
         change

                           Latest  Previou  Daily   Change
                                   s
                                   close    change  in 2021
 .PX     Prague            1351.1  1362.99  -0.87%    +31.55%
                                9       00
 .BUX    Budapes           51344.  51579.6  -0.46%    +21.94%
         t                     46        6
 .WIG20  Warsaw   8                %
 .BETI   Buchare           12195.  12195.6   +0.00    +24.37%
         st                    61        1       %
 .SBITO  Ljublja  8
 .CRBEX  Zagreb   6                %
 .BELEX  Belgrad  .SOFIX  Sofia    Yield   Yield    Spread  Daily
                           (bid)   change   vs      change in
                                            Bund
         Czech                                      spread
         Republi
         c
 CZ2YT=           ps
 CZ5YT=           ps
 CZ10YT           ps
         Poland
 PL2YT=           ps
 PL5YT=           ps
 PL10YT           ps
                  FORWARD
                           3x6     6x9      9x12    3M
                                                    interbank
         Czech    Hungary  Poland   Note:    are for ask
         FRA      prices
         quotes
         *****************************************
         *********************




 (Additional reporting by Pawel Florkiewicz in Warsaw and Jason
Hovet in Prague; Editing by Shailesh Kuber and Ramakrishnan M.)



In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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