January 13, 2020 / 10:32 AM / 6 days ago

CEE MARKETS-Inflation buoys crown, stocks up on US-China deal

    By Radu-Sorin Marinas
    BUCHAREST, Jan 13 (Reuters) - Central European shares edged
up, mirroring a global mode as investors awaited the signing of
a Sino-U.S. trade deal later this week, while the Czech crown
got a boost from a pick-up in inflation.
    By 0950 GMT the crown firmed 0.1% to 25.24 to the
euro, holding near a 23-month high hit at the start of this
year. Other regional currencies were mostly flat, while the
forint edged 0.3% down on the day.
    Czech inflation accelerated in December though most analysts
expected the bank would continue to hold steady on rates despite
ongoing debate over a hike, which was voted down at the last
three meetings.
    Inflation was outside the upper end of the central bank's
tolerance range around its 2% target for a second straight
month.
    "Whether the central bank will further raise rates will
mainly depend on economic development abroad," ING economist
Jakub Seidler said.
    Markets have priced out chances of a rate cut over the next
year period in recent weeks. Some analysts still see chances a
hike could come some time this year if the global outlook
improves.
    On stock markets, Bucharest's blue chip BETI led
regional gains with a 0.5% rise, close to a year high of 10,012,
with heavyweight investment fund Fondul Proprietatea
trading 1.7% up on the day. Poland's market came second
with 0.3%.  
    "Fondul's (share) buyback programme unveiled last week
continues to prop up the stock, and there's also the background
of a long awaited deal between China and the United States that
should happen this week," said a Bucharest-based trader.
           CEE MARKETS  SNAPSHOT    AT                          
                                   1100 CET            
                        CURRENCIE                               
                        S                              
                        Latest     Previous  Daily     Change
                        bid        close     change    in 2020
 Czech                    25.2490   25.2640    +0.06%     +0.72%
 crown                                                 
 Hungary                 335.0000  333.8000    -0.36%     -1.15%
 forint                                                
 Polish                    4.2379    4.2358    -0.05%     +0.44%
 zloty                                                 
 Romanian                  4.7800    4.7791    -0.02%     +0.17%
 leu                                                   
 Croatian                  7.4430    7.4425    -0.01%     +0.03%
 kuna                                                  
 Serbian                 117.5400  117.5800    +0.03%     +0.03%
 dinar                                                 
 Note:     calculated from                   1800 CET           
 daily                                                 
 change                                                
                                                                
                        Latest     Previous  Daily     Change
                                   close     change    in 2020
 Prague                   1137.07  1133.670    +0.30%     +1.92%
                                          0            
 Budapest                45553.83  45364.14    +0.42%     -1.15%
 Warsaw                   2177.92   2167.91    +0.46%     +1.29%
 Buchares                 9998.96   9952.83    +0.46%     +0.22%
 t                                                     
 Ljubljan                  972.82    965.30    +0.78%     +5.07%
 a                                                     
 Zagreb                   2037.89   2036.45    +0.07%     +1.01%
 Belgrade                  795.96    805.40    -1.17%     -0.71%
 Sofia                     578.54    579.24    -0.12%     +1.83%
                        BONDS                                   
                        Yield      Yield     Spread    Daily
                        (bid)      change    vs Bund   change in
 Czech                                                 spread
 Republic                                              
   2-year                  1.7100    0.0200   +230bps      +1bps
   5-year                  1.4430   -0.0340   +194bps      -4bps
                           1.6590    0.0210   +188bps      +1bps
 10-year                                               
 Poland                                                         
   2-year                  1.5660    0.0330   +216bps      +2bps
   5-year                  1.9960    0.0490   +249bps      +4bps
                           2.2960    0.0300   +251bps      +2bps
 10-year                                               
           FORWARD      RATE       AGREEMEN                     
                                   T                   
                        3x6        6x9       9x12      3M
                                                       interbank
 Czech             <PR       2.26      2.27      2.32       2.17
 Rep       IBOR=>                                      
 Hungary           <BU       0.26      0.35      0.43       0.16
           BOR=>                                       
 Poland            <WI       1.76      1.77      1.80       1.71
           BOR=>                                       
 Note:     are for ask prices                                   
 FRA                                                   
 quotes                                                
 ****************************************************           
 **********                                            
 
 (Additional reporting by Jason Hovet in Prague;
Editing by Andrew Cawthorne)
  
 
 
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