October 28, 2019 / 11:01 AM / 21 days ago

CEE MARKETS-Currencies get Brexit boost; eyes on Fed

    WARSAW, Oct 28 (Reuters) - Central European currencies
mostly firmed on Monday with risk sentiment boosted by the EU's
decision to grant the UK a Brexit extension and as investors
waited for a U.S Fed meeting later this week where the central
bank is expected to cut rates.
    European Council President Donald Tusk said on Monday that
the 27 countries that will remain in the European Union after
Britain leaves agreed on Monday to accept London's request for a
Brexit extension until 31 January 2020.
    "I believe it can give us some short-term relief but I think
it is more or less expected. Overall, I believe the clouds are
still above us," said Peter Virovacz, Senior Economist at ING in
Hungary.
    The Polish zloty firmed 0.18% against the euro to
4.271. The Hungarian forint was 0.13% stronger at
328.2.
    A Warsaw-based currency trader said there had been some
selling against the zloty earlier in the session but it had
disappeared and the currency was now back within the range of
recent days. 
    "The Fed is on the horizon this week...(that) is the main
story," he added.
    With domestic markets closed for a holiday, the Czech crown
was 0.09% stronger at 25.52. The Romanian leu was down
0.07% at 4.7565.
    Romania is set to hold a parliamentary vote of confidence in
the Liberal minority government of Prime Minister-designate
Ludovic Orban this week or at the beginning of November.

    It remains unclear whether Orban will secure enough votes
from parliament to approve his cabinet.
    "The campaign for votes continues to make the situation
volatile. Even if the government is approved, the road to
reforms will be full of hurdles," Erste Group analysts wrote in
a note.
    Polish 10-year yields tracked their euro zone
equivalents higher on news of the Brexit extension. At 1032 GMT
Polish 10-year bonds were yielding 2.025%, up 3.4 basis points.

    Poland's Bank Millennium rose 3.4% after it posted
third quarter net profit above expectations at 200.1 million
zlotys.
    The region's main indexes were mixed, with Poland's WIG 20
 rising 0.58% while Budapest's main index was down
0.38%.
    
            CEE        SNAPSHOT   AT                         
            MARKETS              1132 CET            
                       CURRENCI                              
                       ES                            
                       Latest    Previous  Daily     Change
                       bid       close     change    in 2019
 Czech                  25.5280   25.5760    +0.19%    +0.70%
 crown                                               
 Hungary               328.2000  328.6200    +0.13%    -2.17%
 forint                                              
 Polish                  4.2710    4.2785    +0.18%    +0.44%
 zloty                                               
 Romanian                4.7565    4.7530    -0.07%    -2.15%
 leu                                                 
 Croatian                7.4550    7.4525    -0.03%    -0.60%
 kuna                                                
 Serbian               117.3700  117.5700    +0.17%    +0.79%
 dinar                                               
 Note:      calculated from                1800 CET          
 daily                                               
 change                                              
                                                             
                       Latest    Previous  Daily     Change
                                 close     change    in 2019
 Prague                 1061.54  1061.540    +0.00%    +7.60%
                                        0            
 Budapest              41999.04  42159.36    -0.38%    +7.31%
 Warsaw                 2187.81   2175.27    +0.58%    -3.90%
 Bucharest              9657.00   9677.61    -0.21%   +30.79%
 Ljubljana               865.79    866.28    -0.06%    +7.65%
 Zagreb                 2016.79   2012.55    +0.21%   +15.32%
 Belgrade   <.BELEX15    745.16    747.38    -0.30%    -2.17%
            >                                        
 Sofia                   559.88    561.41    -0.27%    -5.82%
                       BONDS                                 
                       Yield     Yield     Spread    Daily
                       (bid)     change    vs Bund   change
                                                     in
 Czech                                               spread
 Republic                                            
   2-year   <CZ2YT=RR    1.2220   -0.0360   +187bps     -5bps
            >                                        
   5-year   <CZ5YT=RR    1.0510   -0.1000   +166bps    -12bps
            >                                        
   10-year  <CZ10YT=R    1.3700   -0.0010   +172bps     -3bps
            R>                                       
 Poland                                                      
   2-year   <PL2YT=RR    1.4880    0.0000   +213bps     -1bps
            >                                        
   5-year   <PL5YT=RR    1.7530    0.0270   +236bps     +1bps
            >                                        
   10-year  <PL10YT=R    2.0250    0.0340   +238bps     +1bps
            R>                                       
            FORWARD    RATE      AGREEMEN                    
                                 T                   
                       3x6       6x9       9x12      3M
                                                     interban
                                                     k
 Czech Rep          <      2.20      2.17      2.11      2.18
            PRIBOR=>                                 
 Hungary            <      0.27      0.33      0.31      0.21
            BUBOR=>                                  
 Poland             <      1.74      1.71      1.69      1.72
            WIBOR=>                                  
 Note: FRA  are for ask prices                               
 quotes                                              
 **************************************************          
 ************                                        
 
 (Reporting by Alan Charlish in Warsaw and Luiza Ilie in
Bucharest; Editing by Kirsten Donovan)
  
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