November 1, 2017 / 11:06 AM / 4 months ago

CEE MARKETS-Czech crown leads gains in holiday-thinned CEE trade

    * Czech PMI at six-year high, boosts assets
    * CEZ shares hit fresh two-year high
    * Central bank set to hike interest rates Thursday

    By Radu-Sorin Marinas
    BUCHAREST, Nov 1 (Reuters) - The Czech crown led regional
gains on Wednesday, boosted by stronger-than-expected
manufacturing data depicting continuous economic growth, though
trading was light with Polish and Hungarian markets closed for
All Saints Day holiday. 
    Czech manufacturing business sentiment jumped to a six-year
high in October due to expanding output and new orders, the
Markit Purchasing Managers' Index (PMI) showed.
    The headline PMI reading rose to 58.5 in October from 56.6
in September, data compiled by IHS Markit showed. Analysts
polled by Reuters forecast a 57.0 reading. A reading of 50 
divides expansion from contraction.
    By 1010 GMT, the crown had firmed 0.24 percent to
25.5970 versus the euro. The Romanian leu traded
virtually unchanged at 4.6030 and the Serbian dinar
edged up 0.1 percent.
    Prague's stocks rose 0.4 percent on the day, chiefly
helped by a 1.3 percent rise in CEZ shares to a fresh
two-year high of 489.20 crowns.
    A Reuters poll showed analysts expect the Czech central
bank, which began raising interest rates in August, to lift its
0.25 percent two-week repo rate again on Thursday.
    "The Czech National Bank (CNB) is highly likely to hike its
policy rate by 25 basis points at Thursday's meeting, following
a 20-basis-point hike in August and the removal of the
Swiss-type euro/crown floor in April," Anders Svendsen, Nordea
chief analyst said in a note.
    "The CNB almost seems eager to strengthen the CZK, which is
already 5 percent stronger against the euro year to date."
 
               CEE MARKETS  SNAPSHOT    AT  1051 CET            
                            CURRENCIES                          
                            Latest     Previous  Daily    Change
                            bid        close     change   in
                                                          2017
 Czech crown                  25.5970   25.6575   +0.24%   5.51%
 Hungary                     311.4000  311.4700   +0.02%  -0.83%
 forint                                                   
 Polish zloty                  4.2333    4.2403   +0.16%   4.03%
 Romanian leu                  4.6027    4.6020   -0.02%  -1.47%
 Croatian                      7.5200    7.5215   +0.02%   0.47%
 kuna                                                     
 Serbian                     119.0400  119.1700   +0.11%   3.62%
 dinar                                                    
 Note: daily   calculated   previous   close at  1800           
 change        from                              CET      
                            STOCKS                              
                            Latest     Previous  Daily    Change
                                       close     change   in
                                                          2017
 Prague                       1070.05   1065.61   +0.42%   +16.1
                                                              1%
 Budapest                    39611.64  39881.22   -0.68%   +23.7
                                                              7%
 Warsaw                       2524.90   2517.03   +0.31%   +29.6
                                                              2%
 Bucharest                    7847.72   7842.76   +0.06%   +10.7
                                                              6%
 Ljubljana                     796.92    796.53   +0.05%   +11.0
                                                              6%
 Zagreb                       1874.49   1881.01   -0.35%  -6.03%
 Belgrade                      730.18    730.72   -0.07%   +1.79
                                                               %
 Sofia                         673.77    671.41   +0.35%   +14.8
                                                              9%
                            BONDS                               
                            Yield      Yield     Spread   Daily
                            (bid)      change    vs Bund  change
                                                          in
 Czech                                                    spread
 Republic                                                 
   2-year                       0.402     0.098   +116bp   +10bp
                                                       s       s
   5-year                       0.722     -0.04   +108bp   -4bps
                                                       s  
   10-year                      1.552    -0.043   +119bp   -5bps
                                                       s  
 Poland                                                         
   2-year                    #VALUE!      0.001  #VALUE!   +1bps
   5-year                    #VALUE!      0.002  #VALUE!   +1bps
   10-year                   #VALUE!          0  #VALUE!   +0bps
               FORWARD      RATE       AGREEMENT                
                            3x6        6x9       9x12     3M
                                                          interb
                                                          ank
 Czech Rep             <PR        0.9      1.08     1.21       0
               IBOR=>                                     
 Hungary               <BU       0.09      0.11     0.15    0.03
               BOR=>                                      
 Poland                <WI       1.77      1.84     1.95    1.73
               BOR=>                                      
 Note: FRA     are for ask                                      
 quotes        prices                                     
 **************************************************************
 
 (Additional reporting by Robert Muller in Prague; Editing by
Emelia Sithole-Matarise)
  
 
 
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