Stocks fall, FX stable as investors digest latest tariff news
European shares fell, led by automobiles, following Trump's latest tariff moves as the EU said on Sunday that it would extend its suspension of countermeasures to US tariffs until early August and continue to press for a negotiated settlement.
Prague's stocks led losses in the CEE region as they slid 0.4 per cent. Budapest's blue chip index was 0.3 per cent lower while Warsaw eased 0.2 per cent. Bucharest's equities bucked the trend as they added 0.5 per cent. The Polish zloty was mostly stable, trading at 4.2625 per euro.
Tariff news and global trade tensions could weaken the zloty on Monday, Bank Millennium wrote in a client note. "Balance of payments data may also weaken the zloty," the bank said.
On Monday, the National Bank of Poland will release its balance of payments data for May. Analysts polled by Reuters estimate that the current account deficit in May was 785 million zlotys (US$215.16 million), compared to a deficit of 374 million zlotys (US$102.51 million) in April.
The Hungarian forint edged higher but held near the psychologically important 400 level, which it fell to on Friday. It edged up 0.02 per cent on the day to trade at 400.05 per euro. "In the case of EUR/HUF, ... we saw the 400 level as neutral for now, ... a move up from 399 looks fair," analysts at ING wrote in a note.
"At the same time, the risk is some long HUF positioning in the market, which could accelerate a sell-off in case of more pressure here," they said. Elsewhere, the Czech crown added 0.08 per cent to trade at 24.656 per euro. The Romanian leu edged up 0.06 per cent to trade at 5.0786 per euro.
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