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CEE MARKETS-Currencies steady, Aug inflation data fail to boost Czech crown
September 11, 2017 / 8:48 AM / a month ago

CEE MARKETS-Currencies steady, Aug inflation data fail to boost Czech crown

    By Krisztina  Than and Jason Hovet
    BUDAPEST/PRAGUE, Sept 11 (Reuters) - Central European
currencies were steady on Monday, with the Czech crown unmoved
by August inflation data, which was in line with analysts'
expectations and stayed above the central bank's target. 
    Analysts are counting on another rate hike this year by the
Czech central bank, following its first rate increase in a
decade in August. 
    Other central banks in the European Union's eastern region
are still in easing mode, in keeping with the European Central
Bank which last week maintained its accommodative policy and
gave no sign it was ready to wind down its asset-buying
programme.
    Most analysts said Monday's Czech data, which showed
year-on-year inflation rate at 2.5 percent, pointed toward a
possible hike in November, rather than when the bank meets on
Sept. 27. The November meeting will be the next rate meeting
after this month's meeting.
    The headline inflation figure was below the central bank's
prediction of 2.6 percent. The bank has an inflation target of 2
percent with a tolerance band of one percentage point in both
directions.
    The Czech market is also bracing for the expiry of a record
amount of T-bills throughout this month. The largest maturity is
due this week and investors may choose to cash in on the FX
market.
    "The crown is obviously not willing to test 26 (versus the
euro) again," CSOB said. "We expect the crown to trade slightly
defensive this week."
    At 0742 GMT, the crown was trading steady at
26.088 to the euro, while the Hungarian forint was
also unchanged at 306.60 versus the euro.
    Stocks in Central Europe firmed, with Bucharest
leading gains, rising 0.9 percent by 0742 GMT, in what was seen
as a positive correction after Friday's falls. 
    Stocks dropped on Friday after the Romanian government said
it may make an existing mandatory private pension scheme
optional starting next year.
    Making it optional would probably reduce pension funds'
investments, whose assets totalled 36.06 billion lei ($9.46
billion) at the end of June.
    The Bucharest exchange has risen 12 percent since the end of
2016, underperforming Warsaw and Budapest this
year, partly due to worry about the future of the pension
system.
        
               CEE MARKETS  SNAPSH   AT  0942 CET          
                            OT                      
                            CURRENCIES                     
                            Latest  Previo  Daily   Change
                                    us              
                            bid     close   change  in 2017
 Czech crown                26.088  26.102   +0.05    3.52%
                                 0       0       %  
 Hungary                    306.60  306.62   +0.01    0.72%
 forint                         00      00       %  
 Polish zloty               4.2450  4.2467   +0.04    3.74%
                                                 %  
 Romanian leu               4.6010  4.6031   +0.05   -1.43%
                                                 %  
 Croatian                   7.4310  7.4315   +0.01    1.67%
 kuna                                            %  
 Serbian                    119.35  119.38   +0.03    3.35%
 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                     1023.5  1021.0   +0.24   +11.06
                                 1       7       %        %
 Budapest                   37796.  37596.   +0.53   +18.10
                                70      75       %        %
 Warsaw                     2495.0  2483.5   +0.46   +28.09
                                 9       8       %        %
 Bucharest                  7930.1  7862.1   +0.87   +11.93
                                 9       5       %        %
 Ljubljana                  812.57  811.98   +0.07   +13.24
                                                 %        %
 Zagreb                     1882.5  1882.7  -0.01%   -5.63%
                                 1       2          
 Belgrade                     0.00  727.27   +0.00  -100.00
                                                 %        %
 Sofia                      707.59  705.51   +0.29   +20.66
                                                 %        %
                            BONDS                          
                            Yield   Yield   Spread  Daily
                            (bid)   change  vs      change
                                            Bund    in
 Czech                                              spread
 Republic                                           
   2-year                   -0.108       0   +063b    -2bps
                                                ps  
   5-year                    0.115   0.029   +048b    +2bps
                                                ps  
   10-year                   0.945       0   +061b    -2bps
                                                ps  
 Poland                                                    
   2-year                     1.67  -0.019   +240b    -4bps
                                                ps  
   5-year                    2.516   0.003   +288b    -1bps
                                                ps  
   10-year                   3.173       0   +284b    -2bps
                                                ps  
               FORWARD      RATE    AGREEMENT              
                            3x6     6x9     9x12    3M
                                                    interba
                                                    nk
 Czech Rep             <PR    0.69    0.81    0.91        0
               IBOR=>                               
 Hungary               <BU    0.13    0.15    0.18     0.15
               BOR=>                                
 Poland                <WI   1.755   1.774   1.803     1.73
               BOR=>                                
 Note: FRA     are for ask                                 
 quotes        prices                               
 **********************************************************
 ****
 

    

 (Additional reporting by Radu Marinas in Bucharest; Editing by
Raissa Kasolowsky)
  
 
 

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