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United States

Aleksandar Vasovic

Depleted Western Balkan rivers hit power generation, up prices

Nov 01 2018

BELGRADE A protracted drought and higher than average September-October temperatures have lowered water levels across the Western Balkans, hitting hydropower output and driving up power prices.

CEE MARKETS-Currencies rebound as dollar dips, Polish bonds ease

Sep 06 2018

* Currencies mostly rebound as dollar sags * Analyst poll sees recovery in crown, forint, zloty * Serbian central bank keeps rates on hold as expected (Adds bond markets, Reuters fx poll, Serbian central bank decision) By Sandor Peto and Aleksandar Vasovic BUDAPEST/BELGRADE, Sept 6 Central European currencies and stocks mostly rebounded on Thursday as the dollar weakened, with the forint lifting off the two-month lows it hit this week. After hitting 329 versus the euro on Wednesday, it was trading up 0.4 percent at 326.75 at 1326 GMT, outperforming the Czech crown despite Czech industrial output jumping 10.3 percent year on year in July, while Hungary's 6.2 percent rise was below forecasts. And the zloty rose 0.3 percent even though the Polish central bank said on Wednesday that interest rates could stay at record lows until beyond the end of 2019. The Polish government bond yield curve steepened, with the 10-year yield bid higher by 6 basis points at 3.295 percent. The bond hit its highest yield level in two months. Hungary, whose central bank is also expected to reaffirm its loose policy stance at its meeting on Sept. 18, has already seen a surge in yields earlier this year. Its 10-year yield was fixed flat at 3.56 percent. The yield on corresponding Czech bonds ticked up by 2 basis points to 2.125 percent, supported by short supply after the government cancelled an auction of 2029-expiry bonds. Societe Generale said in a note that emerging market currencies could weaken further in the next year, and Central European 10-year bond yields could see the biggest increase apart from Brazil. "Contagion (in emerging markets) via sentiment and portfolio de-risking is more likely than direct macro/financial spill-overs," the note said. Views are split over the near-term outlook of the region's assets. Raiffeisen analysts said in a note regional currencies could recover, providing support to Polish government bonds. A Reuters poll of analysts reflected expectations that pressure on the region's main currencies from the dollar's strength and jitters in other emerging markets including Turkey could ease already in the short-term. The survey predicted a firming of about one percent in the forint and the zloty against the euro by the end of the month relative to Wednesday's closing levels. Over the coming year, the prospect of tighter monetary policy in the euro zone could help the forint gain 2.9 percent, the zloty 2.3 percent and the crown 2.6 percent, according to the poll. Serbia's central bank kept the region's highest benchmark rate on hold at 3 percent at its meeting on Thursday. The dinar eased slightly. CEE SNAPSHOT AT MARKETS 1534 CET CURRENCI ES Latest Previous Daily Change bid close change in 2018 Czech <EURCZK= 25.7100 25.7600 +0.19% -0.65% crown > Hungary <EURHUF= 326.7500 328.2000 +0.44% -4.85% forint > Polish <EURPLN= 4.3206 4.3330 +0.29% -3.34% zloty > Romanian <EURRON= 4.6380 4.6360 -0.04% +0.90% leu > Croatian <EURHRK= 7.4340 7.4310 -0.04% -0.05% kuna > Serbian <EURRSD= 118.3000 118.1000 -0.17% +0.17% dinar > Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2018 Prague 1061.25 1065.040 -0.36% -1.57% 0 Budapest 37202.94 37135.33 +0.18% -5.52% Warsaw 2299.43 2295.51 +0.17% -6.57% Bucharest 8345.89 8313.26 +0.39% +7.64% Ljubljana <.SBITOP 857.87 856.77 +0.13% +6.39% > Zagreb 1808.07 1817.70 -0.53% -1.89% Belgrade <.BELEX1 724.71 725.82 -0.15% -4.62% 5> Sofia 628.11 628.11 +0.00% -7.28% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=R 1.4370 0.1080 +201bps +12bps R> 5-year <CZ5YT=R 1.7420 0.0280 +197bps +3bps R> 10-year <CZ10YT= 2.1250 0.0180 +175bps +2bps RR> Poland 2-year <PL2YT=R 1.6370 0.0230 +221bps +3bps R> 5-year <PL5YT=R 2.6070 0.0300 +284bps +3bps R> 10-year <PL10YT= 3.2950 0.0570 +292bps +6bps RR> FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interban k Czech Rep 1.88 2.01 2.12 1.51 <PRIBOR= > Hungary 0.62 0.85 1.05 0.20 Poland 1.77 1.80 1.84 1.71 Note: FRA are for ask prices quotes ************************************************* ************* (Reporting by Sandor Peto; Editing by Catherine Evans and Alexander Smith)

CEE MARKETS-Currencies rebound, Serbian central bank seen holding fire

Sep 06 2018

* Crown, forint, zloty rebound as dollar sags * Serbian central bank seen keeping rates on hold By Sandor Peto and Aleksandar Vasovic BUDAPEST/BELGRADE, Sept 6 Central European currencies and stocks mostly rebounded on Thursday as the dollar's rise stalled ahead of a Serbian central bank meeting that is unlikely to bring a further cut in interest rates. The dollar sagged while sterling jumped on a report that Britain and Germany were prepared to drop a key sticking point in negotiations over Britain's exit from the European Union next year. Hopes that Brexit talks will not collapse is positive for Central European countries that have hundred of thousands of citizens working in Britain. But the main influence on their currencies is risk aversion, which has been often manifested in the past months by a strengthening of the dollar. With the dollar retreating, the forint continued to drift off two-month lows near 329 versus the euro it had reached on Wednesday. At 0842 GMT it was trading at 327.47, up 0.2 percent and outperforming the Czech crown even after data showing Czech industrial output jumped 10.3 percent year on year in July, more than expected, while Hungary's 6.2 percent rise was below forecasts. Monetary policy divergence in the region did not make investors differentiate either. The zloty firmed a quarter of a percent versus the euro even though the Polish central bank confirmed on Wednesday that interest rates could stay at record lows at least until the end of 2019, or even longer. The Serbian central bank is expected to keep its own benchmark rate on hold at its meeting on Thursday, instead of cutting it further. The dinar hovered around Wednesday's closing levels. At 0842 GMT it was 0.1 percent weaker, at 118.22 against the euro. The bank has repeatedly sold dinars in the market this year to stem the currency's strength, the last time on Tuesday. The bank is expected to keep rates on hold throughout the year as headline inflation could pick up and the economy power ahead after a surprisingly strong performance in the first half of the year, said Milan Deskar-Skrbic, an Erste analyst. The bank does not expect inflation to exceed 3 percent, the mid-point of its target range in the next two years, "which means that current monetary policy stance is adequate," he said. "In addition, NBS (the bank) is closely monitoring developments on international markets, especially given the tapering and expected end of bond purchases from the ECB and continuation of a hawkish policy in the U.S.," he added. Societe Generale said in a note that currencies could weaken further in emerging markets in the next year, and Central European 10-year bond yields could see the biggest increase apart from Brazil. "Contagion (in emerging markets) via sentiment and portfolio de-risking is more likely than direct macro/financial spill-overs," the note said. CEE SNAPSHOT AT MARKETS 1042 CET CURRENCI ES Latest Previous Daily Change bid close change in 2018 Czech <EURCZK= 25.7200 25.7600 +0.16% -0.69% crown > Hungary <EURHUF= 327.4700 328.2000 +0.22% -5.06% forint > Polish <EURPLN= 4.3222 4.3330 +0.25% -3.37% zloty > Romanian <EURRON= 4.6386 4.6360 -0.06% +0.89% leu > Croatian <EURHRK= 7.4360 7.4310 -0.07% -0.08% kuna > Serbian <EURRSD= 118.2200 118.1000 -0.10% +0.24% dinar > Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2018 Prague 1067.56 1065.040 +0.24% -0.98% 0 Budapest 37337.69 37135.33 +0.54% -5.18% Warsaw 2305.52 2295.51 +0.44% -6.33% Bucharest 8339.57 8313.26 +0.32% +7.56% Ljubljana <.SBITOP 855.80 856.77 -0.11% +6.13% > Zagreb 1812.02 1817.70 -0.31% -1.67% Belgrade <.BELEX1 723.53 725.82 -0.32% -4.77% 5> Sofia 628.11 628.11 +0.00% -7.28% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=R 1.3390 0.0100 +191bps +2bps R> 5-year <CZ5YT=R 1.7160 0.0020 +194bps +0bps R> 10-year <CZ10YT= 2.0980 -0.0090 +171bps -2bps RR> Poland 2-year <PL2YT=R 1.6370 0.0230 +221bps +3bps R> 5-year <PL5YT=R 2.6100 0.0330 +284bps +3bps R> 10-year <PL10YT= 3.2800 0.0420 +290bps +4bps RR> FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interban k Czech Rep 1.88 2.01 2.12 1.51 <PRIBOR= > Hungary 0.59 0.82 1.04 0.19 Poland 1.77 1.79 1.82 1.71 Note: FRA are for ask prices quotes ************************************************* ************* (Reporting by Sandor Peto; Editing by Catherine Evans)

UPDATE 1-China's Zijin Mining to take stake in Serbian copper complex

Aug 31 2018

BELGRADE, Aug 31 China's Zijin Mining has won the tender to become a strategic partner in Serbia's sole copper complex RTB Bor, pledging to invest $1.26 billion in return for a 63 percent stake, Energy Minister Aleksandar Antic said on Friday.

Serbia turns to tech industry to fight economic stagnation

Aug 16 2018

BELGRADE Serbia, a country that claims inventor Nikola Tesla as one of its most famous sons, is looking to technology to help lift itself out of decades of economic stagnation following the Balkan wars of the 1990s.

Serbia leader suggests compromise on Kosovo border definition

Aug 09 2018

BELGRADE President Aleksandar Vucic suggested on Thursday he is prepared to compromise on defining Serbia's borders with Kosovo, to end a conflict with Europe's newest independent state, a key condition for the Balkan country to join the European Union.

Cable firm United Group draws interest from Cinven and BC Partners: sources

Aug 01 2018

LONDON/BELGRADE Cable and pay TV operator United Group has attracted takeover interest from European private equity funds Cinven and BC Partners ahead of an auction process in September, four sources familiar with the matter told Reuters.

Chinese 'highway to nowhere' haunts Montenegro

Jul 16 2018

PODGORICA Perched atop massive cement pillars that tower above Montenegro's picturesque Moraca river canyon, scores of Chinese workers are building a state-of-the-art highway through some of the roughest terrain in southern Europe. | Video

Serbia must spend to tackle 'devastating' environmental problems: advisors

Jun 26 2018

BELGRADE Serbia's fiscal advisory council urged the government on Tuesday to begin investing 1.3 percent of GDP to tackle "devastating" environmental problems including air pollution and an acute lack of sewage treatment facilities.

Greece, Macedonia sign pact to change ex-Yugoslav republic's name

Jun 18 2018

(This version of the June 17 story corrects academic institution of expert in penultimate paragraph) | Video

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