* Forint retreats from 5-week high, leu hits 6-month low
* Romania has no new government
* Dollar strength weighs on CEE FX
By Sandor Peto and Luiza Ilie
BUDAPEST/BUCHAREST, Dec 28 (Reuters) - Central European
currencies eased against the euro on Wednesday, tracking a
strengthening of the dollar, while investors watched Romania
where President Klaus Iohannis rejected the Social Democrats'
prime minister nominee after the Dec. 11 election.
Figures published on Tuesday showed Romania's budget deficit
remained well below the targetted 2.8 percent of economic
output, at 0.73 percent of GDP. With no government formed, the
country does not yet have a 2017 budget or debt issuance plans.
The Social Democrat Party promised higher wages and pensions
during the election campaign, which if implemented could see the
deficit surge next year and keep inflation anaemic.
The leu hit a new 6-month low against the euro. It
traded at 4.5396 at 0911 GMT.
The prospects of low inflation in the near term keep
short-dated Romanian debt yields below better-rated Poland's
levels, but Romania has the steepest yield curve in the region.
Its 10-year bond yield was bid at 3.68 percent, up 2 basis
points, while Poland's corresponding yield dropped 2 basis
points to 3.42 percent.
Hungarian government bonds were motionless, with no trading
ahead of a news conference of the debt management agency AKK,
scheduled for 1000 GMT, about issuance plans next year.
Hungary's yields are lower than levels in Poland and Romania
but are high relative to euro zone peers. The country's 10-year
yield was fixed at 3.19 percent on Tuesday.
The forint eased by 0.3 percent to 309.5 against
the euro but stayed at the firmer side of the 310 mark, and may
soon head again towards the 5-week highs touched on Tuesday at
308, Erste's Hungarian bank unit said in a note.
Economy Minister Mihaly Varga said last week that recent
forint levels between 310-315 were slightly weaker than
anticipated, but would allow the government to meet its goal to
lower the state debt ratio to economic output from end-2015.
CEE SNAPS AT 1011
MARKETS HOT CET
CURRENCIES
Lates Previ Daily Chang
t ous e
bid close chang in
e 2016
Czech crown 27.02 27.02 -0.01 -0.10
60 20 % %
Hungary 309.0 308.1 -0.29 1.81%
forint 500 400 %
Polish 4.405 4.406 +0.0 -3.34
zloty 0 2 3% %
Romanian 4.539 4.534 -0.10 -0.45
leu 5 8 % %
Croatian 7.545 7.548 +0.0 1.25%
kuna 0 5 5%
Serbian 123.0 123.1 +0.1 -1.24
dinar 000 900 5% %
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 2016
Prague 920.3 920.3 +0.0 -3.77
2 5 0% %
Budapest 31922 31868 +0.1 +33.
.27 .51 7% 45%
Warsaw 1941. 1936. +0.2 +4.4
23 72 3% 1%
Bucharest 7013. 7020. -0.11 +0.1
19 60 % 3%
Ljubljana 703.2 703.6 -0.07 +1.0
2 9 % 2%
Zagreb 1995. 1998. -0.13 +18.
52 11 % 10%
Belgrade <.BELEX15 714.7 716.9 -0.30 +10.
> 4 0 % 97%
Sofia 582.8 583.3 -0.08 +26.
6 1 % 46%
BONDS
Yield Yield Sprea Daily
d
(bid) chang vs chang
e Bund e in
Czech sprea
Republic d
2-year <CZ2YT=RR -1.07 -0.00 -025b -1bps
> 1 9 ps
5-year <CZ5YT=RR -0.23 -0.00 +033 +0bp
> 4 8 bps s
10-year <CZ10YT=R 0.468 -0.00 +028 +1bp
R> 7 bps s
Poland
2-year <PL2YT=RR 1.954 0 +278 +0bp
> bps s
5-year <PL5YT=RR 2.724 -0.00 +329 +1bp
> 1 bps s
10-year <PL10YT=R 3.46 0 +327 +2bp
R> bps s
FORWARD RATE AGREEMENT
3x6 6x9 9x12 3M
inter
bank
Czech Rep < 0.2 0.24 0.12 0
PRIBOR=>
Hungary < 0.37 0.4 0.48 0.38
BUBOR=>
Poland < 1.75 1.77 1.795 1.73
WIBOR=>
Note: FRA are for
quotes ask
prices
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(Reporting by Sandor Peto; Editing by Janet Lawrence)