April 13, 2018 / 10:26 AM / 2 months ago

CEE MARKETS-Zloty firms as Poland move seen soothing EU tension

    * Under pressure from EU, Poland amends judiciary reform
    * Easing tension with Brussels helps Polish assets
    * Stocks rise on global trend, government bonds retreat
    * Dinar firms again despite repeated cbank rate cut surprise

    By Sandor Peto
    BUDAPEST, April 13 (Reuters) - Central European currencies
and stock indexes mostly firmed on Friday on the back of
increasing risk appetite across global markets and a Polish
parliament decision that may sooth tension with Brussels. 
    The lower house of parliament, the Sejm, approved legal
changes late on Thursday in a bid to address criticism from
Brussels and other European Union capitals over a judiciary
reform that is seen as hurting the rule of law.
    "It seems that this time the EU might be (finally) satisfied
with the current Sejm amendments to the controversial judicial
reform made by the euro-sceptic Polish government," KBC analysts
said in a note. 
    "So as a result a risk premium attached to Polish assets
could fall, which should be beneficial for the zloty in the
mid-term horizon," they said.
    The EU has threatened to punish Warsaw through a procedure
that could go as far as suspending its vote in the bloc.

    Poland's move had been expected and that, along with healthy
economic fundamentals had helped the zloty off
multi-month lows reached on March 21.
    On Friday, it gained about 0.1 percent against the euro,
firming in tandem with Hungary's forint.
    It traded at 310.91 at 0921 GMT, slightly off a 1-1/2-month
high set in early trade.
    Warsaw's, Prague's and Budapest's main
equities indexes rose by 0.5-0.6 percent.
    Warsaw, a regional underperformer this year, set a 3-week
high, while the Czech index hit its highest since Feb. 2.
    Polish and Hungarian government bond prices gave up part of
the week's strong gains.
    Poland's 10-year benchmark yield traded just above the 3
percent line. Hungary's corresponding yield rose 5 basis points
from Thursday's fixing to 2.43 percent.
    The dinar traded around 118 against the euro,
firming 0.1 percent even though the Serbian central bank
delivered its second consecutive surprise interest rate cut on
Thursday.
    Analysts have said fighting dinar strength may be an uphill
battle as the currency had been buoyed mainly by increased
demand for lending, strong exports and investments, rather than
portfolio flows, which the bank can influence by changing 
interest rates.
    
            CEE       SNAPSHOT   AT                         
            MARKETS             1121 CET            
                      CURRENCI                              
                      ES                            
                      Latest    Previous  Daily     Change
                      bid       close     change    in 2018
 Czech      <EURCZK=   25.3180   25.3100    -0.03%    +0.88%
 crown      >                                       
 Hungary    <EURHUF=  310.9100  311.2100    +0.10%    +0.00%
 forint     >                                       
 Polish     <EURPLN=    4.1790    4.1811    +0.05%    -0.06%
 zloty      >                                       
 Romanian   <EURRON=    4.6605    4.6615    +0.02%    +0.41%
 leu        >                                       
 Croatian   <EURHRK=    7.4150    7.4215    +0.09%    +0.21%
 kuna       >                                       
 Serbian    <EURRSD=  118.0100  118.1600    +0.13%    +0.42%
 dinar      >                                       
 Note:      calculated from               1800 CET          
 daily                                              
 change                                             
                                                            
                      Latest    Previous  Daily     Change
                                close     change    in 2018
 Prague                1138.81  1131.780    +0.62%    +5.63%
                                       0            
 Budapest             38525.15  38330.37    +0.51%    -2.16%
 Warsaw                2317.77   2306.44    +0.49%    -5.83%
 Bucharest             8904.82   8928.03    -0.26%   +14.85%
 Ljubljana  <.SBITOP    836.15    831.65    +0.54%    +3.69%
            >                                       
 Zagreb                1788.14   1788.64    -0.03%    -2.97%
 Belgrade   <.BELEX1    740.89    738.22    +0.36%    -2.49%
            5>                                      
 Sofia                  663.13    661.06    +0.31%    -2.11%
                      BONDS                                 
                      Yield     Yield     Spread    Daily
                      (bid)     change    vs Bund   change
                                                    in
 Czech                                              spread
 Republic                                           
   2-year   <CZ2YT=R    0.7520    0.0490   +132bps     +4bps
            R>                                      
   5-year   <CZ5YT=R    1.1890    0.0100   +127bps     +0bps
            R>                                      
   10-year  <CZ10YT=    1.7800    0.0120   +126bps     +0bps
            RR>                                     
 Poland                                                     
   2-year   <PL2YT=R    1.5350    0.0070   +210bps     +0bps
            R>                                      
   5-year   <PL5YT=R    2.2730    0.0180   +235bps     +1bps
            R>                                      
   10-year  <PL10YT=    3.0220    0.0110   +250bps     +0bps
            RR>                                     
            FORWARD   RATE      AGREEMEN                    
                                T                   
                      3x6       6x9       9x12      3M
                                                    interban
                                                    k
 Czech Rep                0.95      1.06      1.19      0.90
            <PRIBOR=                                
            >                                       
 Hungary                  0.08      0.11      0.17      0.03
                                                    
 Poland                   1.74      1.74      1.76      1.70
                                                    
 Note: FRA  are for ask prices                              
 quotes                                             
 *************************************************          
 *************                                      
 
 (Additional reporting by Luiza Ilie in Bucharest)
  
 
 
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