March 14, 2019 / 3:03 PM / in a month

CEE MARKETS-Leu jumps from six-week lows, bond yields rise at auctions

    * Leu gains; central bank may have intervened 
    * Romanian government may alter new taxes
    * Hungary, Romania sell bonds at increased yields
    * Forint hits 10-month high, British Brexit vote watched

 (Adds government bond auctions in Bucharest and Budapest)
    By Sandor Peto and Luiza Ilie
    BUDAPEST/BUCHAREST, March 14 (Reuters) - The leu
rebounded on Thursday from the six-week low it reached late on
Wednesday, after what market participants said may have been
possible intervention by Romania's central bank.
    Romanian government bond yields rose to multi-week highs and
the finance ministry sold five-year bonds at an average yield of
4.47 percent, up 18 basis points from a sale four weeks ago.
      
    Romanian asset prices have been jittery in the three months
since the government announced new taxes on various businesses,
including banks.
    The government is expected to work out changes to the levies
by next week to prevent a downgrade of its credit rating outlook
to negative from stable by Standard & Poor's.
    The leu gained 0.3 percent against the euro to
trade at 4.768 at 0930 GMT, off Wednesday's six-week lows at
4.78. 
    "The historically high turnover (on Wednesday) is supporting
the idea of official offers coming in to protect the Romanian
leu," Bucharest-based ING Bank analysts said in a note.
    Romania's overnight ROBOR interbank interest rate
 was bid at 1.41 percent, unchanged from Wednesday
and still near three-month lows.
    The yield on the five-year benchmark Romanian bond
 was bid higher by 7 basis points in the secondary
market at 4.32 percent.
    Government bond yields rose 1 to 2 basis points in the
region's main markets, tracking Bunds.
    The Hungarian government sold 106 billion forints ($381.08
million) worth of bonds at its bi-weekly auction and top-up
tender, boosting its original 65 billion forint offer.
 
    Yields rose from an auction held two weeks ago. But after
the sale they retreated by about 1 basis point in the secondary
market, indicating that demand remained strong.
    Regional currencies were mixed as investors waited for a
third British parliamentary vote this week on its planned exit
from the European Union, this time on whether to delay the March
29 deadline.  
    The forint gained 0.2 percent against the euro to
314.32, setting a 10-month high amid expectations the Hungarian
central bank will start to tighten policy at its meeting on
March 26.
    Poland's zloty weakened, trading at 4.3045 versus
the euro. 
    In equities markets, the stocks OTP, the region's
biggest independent lender which reported record earnings for
2018 two weeks ago, rose more than 1 percent to a record high.  
  
            CEE       SNAPSHOT   AT                         
            MARKETS             1459 CET            
                      CURRENCI                              
                      ES                            
                      Latest    Previous  Daily     Change
                      bid       close     change    in 2019
 Czech      <EURCZK=   25.6740   25.6520    -0.09%    +0.13%
 crown      >                                       
 Hungary    <EURHUF=  314.3200  314.8500    +0.17%    +2.15%
 forint     >                                       
 Polish     <EURPLN=    4.3045    4.3005    -0.09%    -0.35%
 zloty      >                                       
 Romanian   <EURRON=    4.7660    4.7799    +0.29%    -2.35%
 leu        >                                       
 Croatian   <EURHRK=    7.4230    7.4163    -0.09%    -0.18%
 kuna       >                                       
 Serbian    <EURRSD=  118.0200  118.1900    +0.14%    +0.24%
 dinar      >                                       
 Note:      calculated from               1800 CET          
 daily                                              
 change                                             
                                                            
                      Latest    Previous  Daily     Change
                                close     change    in 2019
 Prague                1068.38  1061.630    +0.64%    +8.29%
                                       0            
 Budapest             41038.05  40887.58    +0.37%    +4.85%
 Warsaw                2314.16   2314.79    -0.03%    +1.65%
 Bucharest             7844.62   7857.52    -0.16%    +6.24%
 Ljubljana  <.SBITOP    869.00    874.53    -0.63%    +8.05%
            >                                       
 Zagreb                1767.37   1767.34    +0.00%    +1.06%
 Belgrade   <.BELEX1    707.10    705.47    +0.23%    -7.17%
            5>                                      
 Sofia                  576.25    578.77    -0.44%    -3.06%
                      BONDS                                 
                      Yield     Yield     Spread    Daily
                      (bid)     change    vs Bund   change
                                                    in
 Czech                                              spread
 Republic                                           
   2-year   <CZ2YT=R    1.8210    0.0190   +236bps     +1bps
            R>                                      
   5-year   <CZ5YT=R    1.7940    0.0070   +218bps     +0bps
            R>                                      
   10-year  <CZ10YT=    1.9110    0.0170   +184bps     +1bps
            RR>                                     
 Poland                                                     
   2-year   <PL2YT=R    1.6310   -0.0900   +217bps    -10bps
            R>                                      
   5-year   <PL5YT=R    2.2280    0.0040   +261bps     +0bps
            R>                                      
   10-year  <PL10YT=    2.8840    0.0190   +281bps     +1bps
            RR>                                     
            FORWARD   RATE      AGREEMEN                    
                                T                   
                      3x6       6x9       9x12      3M
                                                    interban
                                                    k
 Czech Rep                2.21      2.26      2.28      2.03
            <PRIBOR=                                
            >                                       
 Hungary                  0.41      0.60      0.80      0.14
                                                    
 Poland                   1.74      1.74      1.74      1.72
                                                    
 Note: FRA  are for ask prices                              
 quotes                                             
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($1 = 278.1600 forints)

 (Editing by Larry King)
  
 
 
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