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CEE MARKETS-Currencies ease as dollar wobbles overshadow robust PMIs
December 1, 2017 / 10:42 AM / in 12 days

CEE MARKETS-Currencies ease as dollar wobbles overshadow robust PMIs

    * Czech, Hungarian, Polish PMIs pick up from already strong
levels
    * Currencies ease on dollar jitters, Fed and ECB uncertainty
    * Polish central bankers eyed after GDP, CPI, PMI data
-dealer

    By Sandor Peto
    BUDAPEST, Dec 1 (Reuters) - Central European currencies
eased on Friday as the dollar's wobbles fuelled uncertainty,
overshadowing a batch of powerful manufacturing indices released
in the region.
    The forint weakened by 0.3 percent against the
euro by 0941 GMT, the zloty 0.2 percent, while the
Czech crown shed less than 0.1 percent.
    Thursday and Friday's economic data should have strengthened
the units according to the textbook, underpinning that growth is
vigorous in the region, fuelled by rising wages, and inflation
is picking up.
    Poland surprised on Thursday reporting a jump in annual
inflation to a 5-year-high of 2.5 percent.
    Robust activity was underpinned by November Purchasing
Managers' Index figures from Budapest, Prague and Warsaw, while
Czech annual third-quarter gross domestic product growth was
confirmed at 5 percent.
    One Budapest-based dealer said the feeling of uncertainty
dominated, after "end-of-month dollar flows sloshed hither and
thither".
    "There has been a sell-off in equities markets, the Fed and
the ECB will meet within the next two weeks, U.S. lawmakers
hesitate over the tax laws, and in politics there is North
Korea," the dealer added.
    The forint underperformed, approaching last-week's 7-month
lows. Hungarian government bond yields dropped by about 5 basis
points, with 10-year papers trading at 2.07 percent.
    These movements were caused by market talk that National
Bank of Hungary (NBH) Deputy Governor Marton Nagy will inform
investors in London about the bank's interest rate swap and
mortgage note buying programmes on Friday, two dealers said.
    An NBH spokesman confirmed to Reuters that Nagy was meeting
investors in London.
    The announcement of the schemes pushed medium-and long-term
Hungarian yields to record lows last week, while government data
 show that foreigners' have withdrawn 207 billion
forints ($785.61 million) from Hungarian bonds since Sept 21.   
     
    That was in line with an outflow from other regional bond
markets.
    Foreigners also scale back their crown assets after a buying
frenzy before the Czech central bank removed a cap on the
currency in April, letting the currency strengthen.
    Their year-end position closings could limit the gains of
the crown which reached 4-and-1/2-year highs against the euro at
25.4 last week, one Prague-based dealer said.
    The zloty, which along with the crown is the world's top
performing currency this year, has danced around the key 4.2
psychological level in the past more than one week.
    There have been no signs that the past day's inflation and
output figures could tip the balance towards the hawkish camp in
the central bank, one Warsaw-based dealer said.
    
               CEE MARKETS  SNAPSH   AT  1041 CET         
                            OT                      
                            CURRENCIES                    
                            Latest  Previo  Daily   Change
                                    us              
                            bid     close   change  in
                                                    2017
 Czech crown                25.515  25.503  -0.05%   5.85%
                                 0       5          
 Hungary                    313.85  312.90  -0.30%  -1.60%
 forint                         00      00          
 Polish zloty               4.2080  4.2005  -0.18%   4.66%
 Romanian leu               4.6377  4.6442   +0.14  -2.21%
                                                 %  
 Croatian                   7.5550  7.5555   +0.01   0.00%
 kuna                                            %  
 Serbian                    119.05  119.29   +0.20   3.61%
 dinar                          00      00       %  
 Note: daily   calculated   previo  close   1800          
 change        from         us      at      CET     
                            STOCKS                        
                            Latest  Previo  Daily   Change
                                    us              
                                    close   change  in
                                                    2017
 Prague                     1060.1  1059.2   +0.09   +15.0
                                 8       7       %      4%
 Budapest                   38387.  38673.  -0.74%   +19.9
                                53      73              5%
 Warsaw                     2409.6  2408.6   +0.04   +23.7
                                 0       9       %      0%
 Bucharest                  7796.2  7802.6  -0.08%   +10.0
                                 1       2              4%
 Ljubljana                  783.36  781.66   +0.22   +9.17
                                                 %       %
 Zagreb                     1869.9  1875.0  -0.27%  -6.26%
                                 0       1          
 Belgrade                   745.96  743.93   +0.27   +3.99
                                                 %       %
 Sofia                      662.99  665.03  -0.31%   +13.0
                                                        6%
                            BONDS                         
                            Yield   Yield   Spread  Daily
                            (bid)   change  vs      change
                                            Bund    in
 Czech                                              spread
 Republic                                           
   2-year                    0.165   0.096   +086b   +10bp
                                                ps       s
   5-year                    0.818  -0.107   +115b   -8bps
                                                ps  
   10-year                   1.533  -0.045   +119b   -1bps
                                                ps  
 Poland                                                   
   2-year                      1.6   0.007   +229b   +1bps
                                                ps  
   5-year                     2.68  -0.009   +301b   +1bps
                                                ps  
   10-year                    3.33  -0.015   +299b   +2bps
                                                ps  
               FORWARD      RATE    AGREEMENT             
                            3x6     6x9     9x12    3M
                                                    interb
                                                    ank
 Czech Rep             <PR    1.04    1.22    1.36       0
               IBOR=>                               
 Hungary               <BU   0.075   0.095   0.135    0.03
               BOR=>                                
 Poland                <WI   1.776   1.835   1.925    1.73
               BOR=>                                
 Note: FRA     are for ask                                
 quotes        prices                               
 *********************************************************
 *****
 ($1 = 263.49 forints)

 (Additional reporting by Jason Hovet in Prague, Bartosz
Chmielewski in Warsaw; Editing by Richard Balmforth)
  
 
 

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