March 26, 2018 / 9:11 AM / a year ago

CEE MARKETS-Stocks rebound, currencies and bonds tread water

    * Stocks regains some ground as global risk aversion abates
    * Hungarian central bank seen keeping rates at record lows
    * Hungarian politics in focus as elections approach
    * Upgrade from S&P fails to lift Croatia's kuna

    By Sandor Peto
    BUDAPEST, March 26 (Reuters) - Central European stocks
recovered on Monday as risk aversion eased after fears of a
trade war gripped global markets last week.
    Budapest's main stock index gained 1 percent, after
hitting a seven-month low on Friday.
    Regional currencies and government bonds were little changed
as global markets remained shaky and uncertainty over interest
rates and politics grew in the region recently.
    Hungary's central bank is expected to keep interest rates on
hold at record lows and reaffirm its loose monetary policy at
its meeting on Tuesday.
    The forint and Hungarian government bonds were
treading water early on Monday.
    Investors were also watching Hungary's political news
parliamentary elections on April 8 approach. Prime Minister
Viktor Orban's right-wing Fidesz party leads by a wide margin,
but a joint opposition candidate won a mayorial by-election in
Hodmezovasarhely last month.    
    "Bad signs for Fidesz would be viewed as negative at first
sight, as they would be seen as uncertainty," one Budapest-based
trader said, but policy comments by the opposition could improve
    Political news rarely affect prices in the European Union's
eastern emerging markets. Markets in Slovakia and Slovenia
sailed through the resignation of their prime ministers earlier
this month unharmed.
    Croatia's kuna was flat and Zagreb's stock index
 eased a shade even though Standard & Poor's raised the
country's credit raying by one notch to BB+ late on Friday
    The move was not a surprise. It reflected fiscal
consolidation and some progress in structural reforms, but
public-sector debt remains high, "hence there is no material
further rating upside", Raiffeisen analyst Gunter Deuber said in
a note.
    In Romania, where inflation has been on a rapid rise due to
a surge in wages, an auction of 2 1/2-year bonds is likely to
meet demand at Friday's secondary market bid around 3.22
percent, ING analysts said in a note.
    The Romanian central bank is expected to continue to raise
its interest rates at its next meeting, on April 6.
    The Raiffeisen note said the central bank was likely to
frontload rate hikes and "the looming tightening of liquidity
might weigh especially on front-end ROMGBs (government bonds)". 
            CEE       SNAPSHOT   AT                         
            MARKETS             1010 CET            
                      Latest    Previous  Daily     Change
                      bid       close     change    in 2018
 Czech      <EURCZK=   25.4180   25.4350    +0.07%    +0.49%
 crown      >                                       
 Hungary    <EURHUF=  312.7000  312.7500    +0.02%    -0.57%
 forint     >                                       
 Polish     <EURPLN=    4.2255    4.2250    -0.01%    -1.16%
 zloty      >                                       
 Romanian   <EURRON=    4.6625    4.6620    -0.01%    +0.37%
 leu        >                                       
 Croatian   <EURHRK=    7.4390    7.4408    +0.02%    -0.12%
 kuna       >                                       
 Serbian    <EURRSD=  118.4800  118.3500    -0.11%    +0.02%
 dinar      >                                       
 Note:      calculated from               1800 CET          
                      Latest    Previous  Daily     Change
                                close     change    in 2018
 Prague                1112.73  1107.720    +0.45%    +3.21%
 Budapest             37305.36  36940.37    +0.99%    -5.26%
 Warsaw                2264.56   2257.22    +0.33%    -7.99%
 Bucharest             8664.80   8660.99    +0.04%   +11.75%
 Ljubljana  <.SBITOP    819.19    822.48    -0.40%    +1.59%
 Zagreb                1826.66   1829.21    -0.14%    -0.88%
 Belgrade   <.BELEX1    760.60    757.29    +0.44%    +0.11%
 Sofia                  659.98    661.77    -0.27%    -2.58%
                      Yield     Yield     Spread    Daily
                      (bid)     change    vs Bund   change
 Czech                                              spread
   2-year   <CZ2YT=R    0.8320    0.0130   +142bps     +1bps
   5-year   <CZ5YT=R    1.2850   -0.0170   +135bps     -3bps
   10-year  <CZ10YT=    1.9310    0.0050   +140bps     +0bps
   2-year   <PL2YT=R    1.5400   -0.0010   +213bps     -1bps
   5-year   <PL5YT=R    2.3980   -0.0010   +246bps     -1bps
   10-year  <PL10YT=    3.2470    0.0060   +271bps     +0bps
            FORWARD   RATE      AGREEMEN                    
                      3x6       6x9       9x12      3M
 Czech Rep                0.96      1.07      1.22      0.90
 Hungary                  0.08      0.11      0.17      0.03
 Poland                   1.72      1.74      1.76      1.70
 Note: FRA  are for ask prices                              
 (Additional reporting by Luiza Ilie in Bucharest, editinb by
Larry King)
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below