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Marcin Goclowski

CEE MARKETS-CEE currencies reverse firming on Brexit twists

Nov 16 2018

* CEE units give up gains on UK politics turmoil * Sterling may continue to guide CEE currencies-analyst * Zloty firms on cbank head quitting rumour, then retreats * Czech PPI rise underpins rate hike expectations By Sandor Peto and Marcin Goclowski BUDAPEST/WARSAW, Nov 16 Central European currencies reversed early gains on Friday as sterling and the euro retreated after a report that British lawmakers planned to bring a vote of no confidence in Prime Minister Theresa May. That overshadowed speculation that Polish central bank (NBP) Governor Adam Glapinski might quit. Sterling emerged as an unlikely driver for Central European currencies this week as the twists and turns over Britain's EU exit deal caused gyrations in European markets. While the region's trade links with Britain faced scrutiny, the main market impacts came via flows into and from big currencies such as sterling, the euro and the dollar, market participants said. "The Brexit news caused quite fast movements in sterling and the euro/dollar. The forint got affected via the dollar," one Budapest-based dealer said. Buying of the dollar, either due to European risks or rising U.S. interest rates, has often triggered a selling of Central European currencies this year. It is now being bought due to uncertainty over the economic impacts of Brexit and Italy's dispute with Brussels over Rome's increased budget deficit goal, analysts and dealers said. "Sterling is likely to set the tone for the CEE currencies in the coming weeks which will be dominated by the ongoing drama in UK politics," Rabobank fx strategist Piotr Matys said in a note dated Nov. 15. The zloty eased 0.1 percent to 4.296 versus the euro by 0958 GMT. Initially, the zloty firmed amid speculation that the NBP's governor might quit, after the head of financial market regulator KNF, proposed for the job by governor Glapinski, resigned amid corruption allegations. "It supports the zloty, as any other central bank governor who would replace him might be more hawkish," one Warsaw-based dealer said. The crown retreated and got stuck on the weaker side of the 26 line versus the euro. Earlier, it strengthened a bit after the Czech October industrial producer price index (PPI) showed a 3.9 percent annual rise, above analysts' 3.3 percent forecast. The rise underpins expectations for Czech central bank rate hikes aimed at fighting inflation to continue, said Radomir Jac, chef economist of Generali Investments CEE. The bank could take a break in December after four straight rate hikes and deliver the next increase in February, he added. Hungary's forint was a touch firmer. Hungary's central bank is expected to hold rates at record lows on Tuesday, but it may send a signal about future tightening against a backdrop of robust economic growth and rising inflation. CEE SNAPSHOT AT MARKETS 1058 CET CURRENCI ES Latest Previous Daily Change bid close change in 2018 Czech <EURCZK= 26.0020 26.0000 -0.01% -1.77% crown > Hungary <EURHUF= 321.6800 321.7900 +0.03% -3.35% forint > Polish <EURPLN= 4.2960 4.2901 -0.14% -2.79% zloty > Romanian <EURRON= 4.6643 4.6640 -0.01% +0.33% leu > Croatian <EURHRK= 7.4330 7.4253 -0.10% -0.04% kuna > Serbian <EURRSD= 118.0500 118.1900 +0.12% +0.38% dinar > Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2018 Prague 1083.63 1081.030 +0.24% +0.51% 0 Budapest 39130.31 39070.97 +0.15% -0.63% Warsaw 2188.25 2202.91 -0.67% -11.09% Bucharest 8539.52 8573.66 -0.40% +10.13% Ljubljana <.SBITOP 814.30 815.59 -0.16% +0.98% > Zagreb 1751.31 1749.13 +0.12% -4.97% Belgrade <.BELEX1 753.35 752.56 +0.10% -0.85% 5> Sofia 596.53 595.74 +0.13% -11.94% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=R 1.6290 0.1660 +228bps +16bps R> 5-year <CZ5YT=R 1.8640 0.0450 +209bps +3bps R> 10-year <CZ10YT= 2.0970 0.0020 +173bps -1bps RR> Poland 2-year <PL2YT=R 1.6230 0.0010 +227bps -1bps R> 5-year <PL5YT=R 2.5220 0.0470 +275bps +3bps R> 10-year <PL10YT= 3.2960 0.0570 +292bps +4bps RR> FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interban k Czech Rep 2.20 2.34 2.44 1.99 <PRIBOR= > Hungary 0.39 0.71 1.07 0.00 Poland 1.77 1.81 1.89 1.72 Note: FRA are for ask prices quotes ************************************************* ************* (Additional reporting by Jan Lopatka from Prague Editing by Keith Weir)

Polish financial regulator quits as government probes bribe allegations: PAP

Nov 13 2018

WARSAW The head of Poland's financial market regulator resigned on Tuesday, the state-run news agency said, hours after he was summoned by the prime minister over newspaper reports he had sought a multi-million dollar bribe from a bank.

Poland's Millennium sees scope for further bank industry deals

Nov 05 2018

WARSAW, Nov 5 Poland's Bank Millennium , fresh from a $484 million deal, expects further consolidation in Eastern Europe's biggest banking sector as low interest rates and consumers' changing habits add to pressure on banks.

SocGen sells Polish Euro Bank for $484 million

Nov 05 2018

WARSAW/PARIS France's Societe Generale has sold its Euro Bank business in Poland to Bank Millennium for 1.83 billion zlotys ($484 million), further reducing its exposure to eastern Europe.

Poland's euroskeptic government falling further behind with urban voters

Oct 22 2018

WARSAW Poland's ruling euroskeptics could see their firm grip on power loosened over the next couple of years as liberal, city-dwellers angry at the government's democratic record are voting against them in growing numbers, regional elections showed.

Poland's ruling eurosceptics score modest gains in local vote, lose Warsaw

Oct 21 2018

WARSAW Poland's ruling eurosceptic Law and Justice (PiS) scored limited gains in regional government in Sunday's election, but lost a high-profile race for Warsaw mayor, an exit poll showed, laying bare divisions in Poland over the party's democracy record.

Movie critical of Catholic church breaks box-office records in Poland

Oct 01 2018

WARSAW Nearly a million people have flocked to cinemas across Poland in the last three days to see a movie that depicts Catholic priests in a highly unflattering light, breaking box-office records, its distributor said on Monday.

Movie critical of Catholic church breaks box-office records in Poland

Oct 01 2018

WARSAW, Oct 1 Nearly a million people have flocked to cinemas across Poland in the last three days to see a movie that depicts Catholic priests in a highly unflattering light, breaking box-office records, its distributor said on Monday.

Movie about corrupt priests outrages politicians in Catholic Poland

Sep 28 2018

WARSAW A new movie featuring drunk, fornicating and child-abusing priests has outraged some conservative politicians in Poland and fueled debate about the Catholic Church's influence in one of Europe's most devout nations.

CEE MARKETS-Crown firms as Czech inflation picks up

Sep 10 2018

* Czech CPI picks up more than expected, crown firms * Czech central banker says crown fx rates are inflationary * U.S. data initially weigh on forint and zloty By Sandor Peto and Marcin Goclowski BUDAPEST/WARSAW, Sept 10 The crown firmed on Monday, outperforming most Central European peers, after Czech inflation data showing a bigger-than-expected pick-up fuelled expectations for rate hikes from the Czech central bank (CNB). The zloty was flat, and the forint slightly firmer at 0916 GMT, regaining ground after an initial weakening caused by Friday's U.S. payroll figures which maintained the possibility of faster Federal Reserve interest rates hikes. Higher Fed rates make assets relatively less attractive in Hungary and Poland where the central banks keep interest rates at record lows. Czech debt yields stay below U.S. levels even though the CNB has increased its benchmark rate five times since August 2017. But Monday's inflation figures and other Czech data showing record vacancies in the European Union's tightest labour market underpinned expectations for further hikes in the 1.25 percent rate. Annual inflation accelerated to 2.5 percent in August from July 2.3 percent due to rising rents and utility costs, above analysts' 2.4 percent forecast and the CNB's 2 percent target. Czech central banker Vojtech Benda was quoted as saying on Monday that the crown's exchange rate was developing in an inflationary direction, meaning the currency was too weak. The unit firmed 0.2 percent against the euro after the data and the comments, to 25.64. "We see a relatively high probability" that the CNB will hike rates again at its Sept. 26 meeting, Erste analyst Jan Zemlicka said in a note. The bank could raise rates twice in the rest of 2018, if the crown remains weak, and two more increases could be in the pipeline in 2019, Zemlicka added. Elsewhere, the leu also firmed slightly as the central bank held a repo auction, staying though within the past two weeks ranges. The government is likely to sell the 5-year bonds offered at an auction near secondary market levels around 4.34 percent, ING analysts said in a note. Romania is due to release August inflation data on Tuesday. The annual figure is expected to pick up to 4.8 percent due to a hike in household gas prices, after a slump to 4.6 percent in July from June's 5.4 percent, the region's highest level. Regional stocks were mostly rangebound. Shares in the EU's biggest coking coal producer, state-run JSW fell 8 percent after Rzeczpospolita daily reported its Chief Executive Officer Daniel Ozon may lose his job. The paper also quoted Ozon as saying that he faced a pressure to invest in another state-run company - construction firm Polimex Mostostal. The latter firm's shares rose 6.6 percent on the report, brokers said. CEE SNAPSHOT AT MARKETS 1116 CET CURRENCI ES Latest Previous Daily Change bid close change in 2018 Czech <EURCZK= 25.6400 25.6800 +0.16% -0.38% crown > Hungary <EURHUF= 324.5500 325.0500 +0.15% -4.20% forint > Polish <EURPLN= 4.3100 4.3101 +0.00% -3.10% zloty > Romanian <EURRON= 4.6335 4.6408 +0.16% +1.00% leu > Croatian <EURHRK= 7.4195 7.4243 +0.06% +0.15% kuna > Serbian <EURRSD= 118.2600 118.3000 +0.03% +0.20% dinar > Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2018 Prague 1078.47 1070.200 +0.77% +0.03% 0 Budapest 37201.49 37189.98 +0.03% -5.53% Warsaw 2269.74 2257.30 +0.55% -7.78% Bucharest 8313.03 8304.71 +0.10% +7.21% Ljubljana <.SBITOP 857.47 857.16 +0.04% +6.34% > Zagreb 1802.78 1806.53 -0.21% -2.18% Belgrade <.BELEX1 723.65 724.72 -0.15% -4.76% 5> Sofia 627.52 626.99 +0.08% -7.37% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=R 1.4760 0.1400 +203bps +13bps R> 5-year <CZ5YT=R 1.7800 0.0500 +199bps +3bps R> 10-year <CZ10YT= 2.1510 0.0310 +174bps +1bps RR> Poland 2-year <PL2YT=R 1.6440 0.0040 +220bps -1bps R> 5-year <PL5YT=R 2.6250 0.0160 +283bps +0bps R> 10-year <PL10YT= 3.3040 0.0170 +290bps +0bps RR> FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interban k Czech Rep 1.88 2.01 2.12 1.51 <PRIBOR= > Hungary 0.57 0.78 1.00 0.20 Poland 1.76 1.81 1.84 1.71 Note: FRA are for ask prices quotes ************************************************* ************* (Additional reporting by Luiza Ilie in Bucharest; Editing by Alison Williams)

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