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CEE MARKETS-Currencies trade near multi-week lows on French vote worry
April 21, 2017 / 9:56 AM / 5 months ago

CEE MARKETS-Currencies trade near multi-week lows on French vote worry

    * Fear of radical win in France elections weighs on
currencies
    * Robust Polish economic figures fail to lift zloty
    * Wage hike bill is additional worry in Romania
    * Czech crown rebounds but seen jittery around former cap

    By Sandor Peto and Bartosz Chmielewski
    BUDAPEST/WARSAW, April 21 (Reuters) - Central European
currencies hovered near multi-week lows on Friday due to fears
that an anti-EU candidate may win the first round of France's
presidential election on Sunday.
    Opinion polls put centrist Emmanuel Macron in pole position,
but a shooting of a French policeman in Paris on Thursday might
strengthen far-right candidate Marine Le Pen, who urged France
on Friday to reinstate border checks.
    "Markets could worry if Le Pen or (radical left candidate
Jean-Luc) Melenchon wins (the first round)," Erste analysts said
in a note.
    The zloty hit a one-month low against the euro and
traded at 4.27 at 0845 GMT.
    "After yesterday's terrorist attack and days before a
presidential election, market attention is focused on France,"
Warsaw-based Millennium bank said in a note.
    It said the possibility of the far-right candidate's
victory, as well as Thursday's attack in Paris, had a negative
impact on risk sentiment and "weighed on emerging markets
currencies."
    The leu eased to 4.544, a touch off a 17-day low
which it touched in early trade, just days after it set a
2-month high, amid worries over a bill on continuing public
sector wage increases, which will be submitted to parliament on
Monday.
    Earlier wage hikes and tax cuts were already feared to boost
the budget deficit.    
    The Czech crown rebounded to firm side of its
former cap of 27 against the euro.
    On Thursday it pierced the 27 line for the first time since
the central bank removed the cap two weeks ago.
    Despite a healthy Czech economic outlook, a huge pile of
long crown positions accumulated by investors in the past months
is seen keeping it jittery.
    Investors in Poland also hold their breath ahead of a review
of Poland's credit ratings by Standard & Poor's after markets
close.
    S&P, which downgraded Poland in January last year, is
unlikely to change the rating or the stable outlook on it, but
investors will watch its comments for signs of a future change.
    Polish and Hungarian government bonds traded around
multi-month lows in the past weeks, helped by loose monetary
policies across Central Europe as an earlier rebound in
inflation rates seems to have lost steam.
    Currencies, meanwhile, mostly eased. 
    Robust Polish constructions, industrial output and retail
data released on Thursday failed to lift the zloty as the Polish
central bank, which is due to release the minutes of its last
meeting on Friday, is unlikely to shift towards hawkish bias.
    
              CEE        SNAPS   AT  1045          
              MARKETS    HOT    CET           
                         CURRENCIES                
                         Lates  Previ  Daily  Chang
                         t      ous           e
                         bid    close  chang  in
                                       e      2017
 Czech crown             26.95  26.98   +0.1  0.21%
                            00     80     4%  
 Hungary                 313.6  313.9   +0.1  -1.54
 forint                    500    850     1%      %
 Polish                  4.270  4.268  -0.03  3.14%
 zloty                       0      9      %  
 Romanian                4.544  4.541  -0.06  -0.20
 leu                         0      5      %      %
 Croatian                7.453  7.455   +0.0  1.37%
 kuna                        0      5     3%  
 Serbian                 123.6  123.5  -0.06  -0.20
 dinar                     000    250      %      %
 Note: daily  calculate  previ  close  1800        
 change       d from     ous    at     CET    
                         STOCK                     
                         S                    
                         Lates  Previ  Daily  Chang
                         t      ous           e
                                close  chang  in
                                       e      2017
 Prague                  975.7  975.1   +0.0   +5.8
                             2      9     5%     7%
 Budapest                33026  32955   +0.2   +3.2
                           .72    .02     2%     0%
 Warsaw                  2290.  2285.   +0.2   +17.
                            35     82     0%    58%
 Bucharest               8222.  8209.   +0.1   +16.
                            42     66     6%    05%
 Ljubljana               773.8  774.1  -0.04   +7.8
                             2      5      %     4%
 Zagreb                  1950.  1949.   +0.0  -2.24
                            21     77     2%      %
 Belgrade     <.BELEX15  735.8  732.8   +0.4   +2.5
              >              9      0     2%     8%
 Sofia                   654.5  653.6   +0.1   +11.
                             9      2     5%    62%
                         BONDS                     
                         Yield  Yield  Sprea  Daily
                                       d      
                         (bid)  chang  vs     chang
                                e      Bund   e in
 Czech                                        sprea
 Republic                                     d
   2-year     <CZ2YT=RR      0  0.085   +079   +8bp
              >                          bps      s
   5-year     <CZ5YT=RR  0.234  0.014   +068   +1bp
              >                          bps      s
   10-year    <CZ10YT=R  1.014  0.006   +078   +1bp
              R>                         bps      s
 Poland                                            
   2-year     <PL2YT=RR  1.998  -0.00   +279   +0bp
              >                     3    bps      s
   5-year     <PL5YT=RR  2.865  0.017   +331   +1bp
              >                          bps      s
   10-year    <PL10YT=R  3.418  0.013   +318   +2bp
              R>                         bps      s
              FORWARD    RATE   AGREEMENT          
                         3x6    6x9    9x12   3M
                                              inter
                                              bank
 Czech Rep            <   0.31   0.34   0.41      0
              PRIBOR=>                        
 Hungary              <   0.23   0.32   0.41   0.16
              BUBOR=>                         
 Poland               <  1.752  1.779  1.823   1.73
              WIBOR=>                         
 Note: FRA    are for                              
 quotes       ask                             
              prices                          
 **************************************************
 ************
 
 (Additional reporting by Luiza Ilie in Bucharest; Editing by
Toby Chopra)
  
 
 

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