October 9, 2017 / 10:08 AM / 2 months ago

CEE MARKETS-Strong data fails to boost Czech crown, Serbia cuts rates again

    * Serbian central bank repeats rate cut surprise, dinar
eases
    * Robust Czech data fail to lift crown significantly
    * Hungary cbank pumps money into markets through fx tender
    * Romania rejects all bids at government bond tender

 (Adds Czech central bank and Polish rate setter comment,
Romanian bond tender, Hungarian central bank's fx swap tender)
    By Sandor Peto
    BUDAPEST, Oct 9 (Reuters) - The dinar eased on Monday after
Serbia's central bank cut interest rates in its second surprise
reduction in two months while robust Czech economic data
underpinned expectations for a central bank (CNB) rate hike
there.
    The dinar shed 0.2 percent against the euro, to
trade at 119.48 at 1341 GMT, after the bank lowered its
benchmark rate by 25 basis points to 3.5 percent after a slowing
in Serbian inflation. 
    Across the region, monetary policy is diverging, with the
European Central Bank not rushing to follow the example of the
Fed's tightening. 
    Hungary's central bank (NBH) cut one of its rates and
announced measures to boost liquidity in forint markets while in
August the CNB became the first in the European Union since 2012
to raise rates.
    The Czech data failed to lift the crown.
    But some of the region's other currencies and government
bonds rose, recovering from a fall triggered by U.S. jobs data
which has strengthened expectations for a December interest rate
hike in the world's biggest economy.
    Czech figures released on Monday showed a fall in
unemployment to a record low in September and a
higher-than-expected 5.8 percent annual rise in industrial
output in August.
    Annual inflation rose to 2.7 percent in September, the
highest in five years. The CNB said the inflation figures were
in line with its forecasts.
    The crown eased a little further to 25.89 against the euro,
after its sharp retreat on Friday following the U.S. jobs data.
    Last week, at 25.789, it touched its highest levels since
the CNB removed a cap that had kept the crown weaker than 27
versus the euro for more than three years.
    The forint and the zloty recovered from Friday's lows, and
government bond yields in the region mostly fell after a jump on
Friday.
    The Polish central bank may need a small rate hike early
next year, rate setter Lukasz Hardt told Reuters.
    Most analysts predicted a hike only for the last quarter of
2018 in a recent Reuters poll. 
    The forint, trading at 312.09 against the euro,
was off the 5-month low hit on Friday at 312.58.
    The NBH kept markets awash in money, injecting further
forint liquidity through its weekly fx swap tender.
    In Romania, where the central bank is facing a liquidity
squeeze in leu markets, the government rejected all bids at a
tender to sell April 2024 treasury bonds.
    Five of seven analysts in a Reuters poll projected that the
bank would keep rates on hold at its last meeting this year on
Nov. 7.
    
               CEE MARKETS  SNAPSH   AT  1541 CET         
                            OT                      
                            CURRENCIES                    
                            Latest  Previo  Daily   Change
                                    us              
                            bid     close   change  in
                                                    2017
 Czech crown                25.890  25.875  -0.06%   4.31%
                                 0       0          
 Hungary                    312.09  312.53   +0.14  -1.05%
 forint                         00      00       %  
 Polish zloty               4.3060  4.3109   +0.11   2.27%
                                                 %  
 Romanian leu               4.5733  4.5773   +0.09  -0.84%
                                                 %  
 Croatian                   7.5050  7.5073   +0.03   0.67%
 kuna                                            %  
 Serbian                    119.48  119.22  -0.22%   3.24%
 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                     1057.5  1058.0  -0.04%   +14.7
                                 9       6              5%
 Budapest                   38033.  37941.   +0.24   +18.8
                                88      82       %      4%
 Warsaw                     2495.2  2479.4   +0.64   +28.1
                                 7       6       %      0%
 Bucharest                  8013.2  7984.3   +0.36   +13.1
                                 9       2       %      0%
 Ljubljana                  810.78  799.73   +1.38   +12.9
                                                 %      9%
 Zagreb                     1811.7  1813.2  -0.09%  -9.18%
                                 2       7          
 Belgrade                   727.11  726.08   +0.14   +1.36
                                                 %       %
 Sofia                      678.23  679.50  -0.19%   +15.6
                                                        5%
                            BONDS                         
                            Yield   Yield   Spread  Daily
                            (bid)   change  vs      change
                                            Bund    in
 Czech                                              spread
 Republic                                           
   2-year                     0.25   -0.12   +095b  -12bps
                                                ps  
   5-year                    0.525  -0.009   +079b   +0bps
                                                ps  
   10-year                   1.351   0.009   +090b   +2bps
                                                ps  
 Poland                                                   
   2-year                     1.78   0.002   +248b   +1bps
                                                ps  
   5-year                    2.773   0.016   +304b   +2bps
                                                ps  
   10-year                   3.485   0.005   +304b   +2bps
                                                ps  
               FORWARD      RATE    AGREEMENT             
                            3x6     6x9     9x12    3M
                                                    interb
                                                    ank
 Czech Rep             <PR    0.75    0.87    0.99       0
               IBOR=>                               
 Hungary               <BU    0.09    0.13    0.21    0.03
               BOR=>                                
 Poland                <WI   1.776   1.833   1.904    1.73
               BOR=>                                
 Note: FRA     are for ask                                
 quotes        prices                               
 *********************************************************
 *****
 
 (Additional reporting by Radu Marinas in Bucharest, editing by
Gareth Jones and Ed Osmond)
  
 
 

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