CEE MARKETS-Rate cut expectations weigh on Polish zloty
By Alan Charlish
WARSAW, April 24 (Reuters) - The Polish zloty EURPLN= was a touch weaker on Thursday, as rising expectations of a rate cut in May offset optimism about an easing of global trade tensions.
U.S. Treasury Secretary Scott Bessent said on Wednesday that high tariffs between the United States and China are not sustainable, as President Donald Trump's administration signaled openness to de-escalating a trade war between the world's two largest economies that has raised fears of recession.
Meanwhile, three members of Poland's Monetary Policy Council (MPC) signalled a potential rate cut in May in interviews published on Wednesday and Thursday.
Poland's main interest rate has been on hold at 5.75% since October 2023, but with the outlook for inflation lower than previously thought and recent data showing signs of weakness in the economy, a rate cut next month appears increasingly likely.
The zloty was 0.11% weaker against the euro at 4.2815 at 0811 GMT.
"Globally there is some better news regarding tariffs, so that is improving sentiment, but on the other hand we continue to get comments from MPC members saying that they will probably cut rates in May, and that should weaken the currency," said a Warsaw-based currency trader.
The Czech crown EURCZK= was little changed at 24.975, hovering around the psychologically important 25 per euro level it had weakened past earlier this month when the tariff-induced market turmoil started.
The crown has been gaining support from better global mood as well as bets the Czech National Bank will continue to hold interest rates unchanged as inflationary risks, including from trade wars, persist.
"Although we expect a rate cut at the May meeting, risks are building on the hawkish side in the central bank's tone so far," ING said.
The Hungarian forint EURHUF= firmed 0.11% to 408.
CEE MARKETS SNAPSHOT AT 1011 CET | |||||
CURRENCIES | Latest trade | Previous close | Daily change | Change in 2025 | |
Czech crown | EURCZK= | 24.9750 | 24.9770 | +0.01% | +0.94% |
Hungary forint | EURHUF= | 408.0000 | 408.4500 | +0.11% | +0.84% |
Polish zloty | EURPLN= | 4.2815 | 4.2770 | -0.11% | -0.11% |
Romanian leu | EURRON= | 4.9775 | 4.9774 | -0.00% | -0.02% |
Serbian dinar | EURRSD= | 117.1500 | 117.2500 | +0.09% | -0.17% |
Note: daily change calculated from 1800 CET | |||||
| |||||
STOCKS | Latest | Previous close | Daily change | Change in 2025 | |
Prague | .PX | 2066.83 | 2073.7200 | -0.33% | +17.42% |
Budapest | .BUX | 90037.75 | 90786.49 | -0.82% | +13.50% |
Warsaw | .WIG20 | 2756.22 | 2783.01 | -0.96% | +25.74% |
Bucharest | .BETI | 17369.78 | 17330.68 | +0.23% | +3.88% |
| |||||
BONDS | Yield (bid) | Yield change | Spread vs Bund | Daily change in spread | |
Czech Rep 2-year | CZ2YT=RR | 3.2900 | 0.0140 | +157bps | +3bps |
Czech Rep 5-year | CZ5YT=RR | 3.5570 | -0.0270 | +153bps | -1bps |
Czech Rep 10-year | CZ10YT=RR | 4.0780 | 0.0220 | +160bps | +4bps |
Poland 2-year | PL2YT=RR | 4.3540 | -0.0130 | +263bps | +0bps |
Poland 5-year | PL5YT=RR | 4.7060 | -0.0410 | +268bps | -2bps |
Poland 10-year | PL10YT=RR | 5.2790 | -0.0180 | +280bps | +0bps |
| |||||
FORWARD RATE AGREEMENTS | 3x6 | 6x9 | 9x12 | 3M interbank | |
Czech Rep | CZKFRA, PRIBOR= | 3.43 | 3.20 | 3.04 | 3.67 |
Hungary | HUFFRA, BUBOR= | 6.93 | 6.68 | 6.22 | 6.50 |
Poland | PLNFRA, WIBOR= | 4.44 | 4.05 | 3.77 | 5.47 |
Note: FRA quotes are for ask prices | |||||
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