November 4, 2019 / 9:26 AM / a month ago

CEE MARKETS-Stocks and currencies mostly up, Polish PMI drags on zloty

    * Polish PMI biggest drop in over 10 years 
    * Rate meetings on the agenda this week
    * Raiffeisen says chance of Serbia cut
    * Romania confidence vote watched by markets, EU

    PRAGUE, Nov 4 (Reuters) - Central European currencies and
stock markets mostly pushed higher on Monday with risk appetite
helped by optimism over U.S.-China trade talks, although a sharp
drop in Polish manufacturing sentiment weighed on the zloty.
    Polish manufacturing activity saw its worst downturn in more
than 10 years in October as output, new orders and exports all
contracted sharply, the IHS Markit Purchasing Managers' Index
showed on Monday.
    "This data shows that the resilience of Polish manufacturing
sector to the recession in German manufacturing is getting
weaker," Grzegorz Maliszewski, chief economist at Millennium
Bank, said.
    Central Europe's economies have so far been largely immune
to weakening abroad as domestic growth is powered by homegrown
demand thanks to tight labour markets boosting wages.
    The zloty, which has risen to a three-month high
in recent weeks, fell less than 0.1% to 4.254 to the euro after
the PMI data, and bond yields rose.
    The Polish central bank is one of three in the region
holding an interest rate meeting this week although markets
expect rates to stay on hold when a decision comes on Wednesday.
    The Czech central bank, which is one of the few banks in
Europe still debating whether to raise rates even as the global
mood turns to easing policy amid global trade tensions, meets on
Thursday and is also likely to stay on hold.
    Serbia meets on rates on Tuesday, and Raiffeisen said a cut
could result. "For Serbia we see a good chance of another rate
cut following two rate reductions each of 25bp this summer," it
said in a note. 
    Serbia's dinar added 0.1% to 117.34 to the euro
and the Czech crown edged up to 25.505. In Hungary,
the forint fell 0.1%.
    On stock markets, better global sentiment and the re-opening
of markets after a Friday holiday helped push Warsaw's to
region-leading gains, with the blue-chip WIG20
increasing 1.3%.
    In Romania, the leu ticked up less than 0.1% to
4.752 to the euro before a vote of confidence for a new centrist
minority cabinet, the outcome of which risks extending a
policymaking vacuum in the European Union as the bloc awaits for
a Romanian nomination to the new executive.
    Should prime minister-designate Ludovic Orban lose the vote,
the country's president would have to nominate a new premier,
likely further delaying Romania's pick for the European
Commission.
    
                  CEE      SNAPSH   AT                   
                  MARKETS  OT      0957            
                                   CET             
                           CURREN                        
                           CIES                    
                           Latest  Previo  Daily   Change
                                   us              
                           bid     close   change  in
                                                   2019
 EURCZK  Czech    <EURCZK  25.505  25.514   +0.04   +0.79
 =       crown    =>            0       5       %       %
 EURHUF  Hungary  <EURHUF  328.45  328.08  -0.11%  -2.24%
 =       forint   =>           00      00          
 EURPLN  Polish   <EURPLN  4.2535  4.2513  -0.05%   +0.85
 =       zloty    =>                                    %
 EURRON  Romania  <EURRON  4.7523  4.7543   +0.04  -2.07%
 =       n leu    =>                            %  
 EURHRK  Croatia  <EURHRK  7.4500  7.4555   +0.07  -0.54%
 =       n kuna   =>                            %  
 EURRSD  Serbian  <EURRSD  117.34  117.47   +0.11   +0.82
 =       dinar    =>           00      00       %       %
         Note:    calculated from          1800          
         daily                             CET     
         change                                    
                                                         
                           Latest  Previo  Daily   Change
                                   us              
                                   close   change  in
                                                   2019
 .PX     Prague            1065.1  1061.8   +0.31   +7.96
                                0     300       %       %
 .BUX    Budapes           42422.  42159.   +0.62   +8.39
         t                     67      58       %       %
 .WIG20  Warsaw   <.WIG20  2223.3  2194.1   +1.33  -2.34%
                  >             5       0       %  
 .BETI   Buchare           9618.6  9607.6   +0.11   +30.2
         st                     0       7       %      7%
 .SBITO  Ljublja  <.SBITO  852.20  853.56  -0.16%   +5.96
 P       na       P>                                    %
 .CRBEX  Zagreb   <.CRBEX  1994.5  1991.9   +0.13   +14.0
                  >             0       8       %      5%
 .BELEX  Belgrad  <.BELEX  750.96  750.59   +0.05  -1.41%
 15      e        15>                           %  
 .SOFIX  Sofia    <.SOFIX  554.02  554.64  -0.11%  -6.80%
                  >                                
                           BONDS                         
                           Yield   Yield   Spread  Daily
                           (bid)   change  vs      change
                                           Bund    in
         Czech                                     spread
         Republi                                   
         c                                         
 CZ2YT=           <CZ2YT=  1.2980  0.0580   +195b   +6bps
 RR      2-year   RR>                          ps  
 CZ5YT=           <CZ5YT=  1.1080  -0.055   +173b   -6bps
 RR      5-year   RR>                   0      ps  
 CZ10YT           <CZ10YT  1.3870  0.0120   +175b   -1bps
 =RR     10-year  =RR>                         ps  
         Poland                                          
 PL2YT=           <PL2YT=  1.4540  0.0180   +211b   +2bps
 RR      2-year   RR>                          ps  
 PL5YT=           <PL5YT=  1.7490  0.0210   +237b   +1bps
 RR      5-year   RR>                          ps  
 PL10YT           <PL10YT  1.9920  0.0270   +235b   +1bps
 =RR     10-year  =RR>                         ps  
                  FORWARD  RATE    AGREEM                
                                   ENT             
                           3x6     6x9     9x12    3M
                                                   interb
                                                   ank
         Czech    <CZKFRA    2.22    2.20    2.11    2.17
         Rep      ><PRIBO                          
                  R=>                              
         Hungary  <HUFFRA    0.27    0.30    0.37    0.20
                  ><BUBOR                          
                  =>                               
         Poland   <PLNFRA    1.73    1.71    1.67    1.71
                  ><WIBOR                          
                  =>                               
         Note:    are for ask                            
         FRA      prices                           
         quotes                                    
         ****************************************        
         **********************                    
                                                         
 

     

 (Reporting by Jason Hovet in Prague, Luiza Ilie in Bucharest
and Alicja Ptak in Warsaw; Editing by Andrew Heavens)
  
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