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Radu-Sorin Marinas

IMF says Romania risks missing its fiscal deficit goal

Nov 12 2018

BUCHAREST, Nov 12 Romania risks missing its budget deficit goal this year, the International Monetary Fund warned on Monday, recommending the country reassess wage and pension hike plans.

CEE MARKETS-Bond auctions draw strong demand despite Hungary's CPI rise

Nov 08 2018

* Hungary's CPI unexpectedly rises in Oct, lifting yields * Budapest, Bucharest high-yielding bond sales draw strong demand * Serbian central meets, holds fire (Recasts with Hungary's and Romania's bond auctions, rise in Romanian central bank's inflation forecast, new comments) By Sandor Peto and Radu-Sorin Marinas BUDAPEST/BUCHAREST, Nov 8 Hungarian bond yields rose after inflation unexpectedly picked up in October to its highest level in almost six years, fuelling demand at the government's bi-weekly auctions on Thursday. A bond auction was also well-bid in Romania, where bonds offer an even higher yield premium over euro zone peers, then Hungary. Yields even dropped in Bucharest's secondary market, even though the central bank (NBR) slightly increased its inflation forecasts for 2019 to 2.9 percent. That is still within its 1.5-3.5 percent target range and well below this year's levels around 5 percent. The revision had been priced in, ING analyst Ciprian Dascalu said. Interbank markets are awash in money both in Budapest, where the central bank (NBH) keeps its base rate at record lows of 0.9 percent, and in Bucharest where the bank injected funds into markets via its repo auctions in the past weeks. Romania's 2-year bond yield was bid at 3.78 percent in the secondary market, down 4 basis points. The 10-year Romanian yield was bid at 4.75 percent at 1348 GMT, down 21 basis points, but still 430 basis points above the corresponding Bunds. Hungary's 10-year yield rose 9 basis points to 3.64 percent, after statistics showed a surprise rise in annual inflation to 3.8 percent in October, near the top of the NBH's 2-4 percent target range, from September's 3.6 percent. The country's 2020-expiry bond yields rose by only 1-2 basis points to around 1 percent. But one of the steepest yield curves in the world can flatten next year if the NBH starts to reverse its monetary stimulus, one Budapest-based trader said. "Yields may be attractive, given the risks attached to euro zone bonds, including Italy's budget and (German Chancellor Angela) Merkel's future," the trader said. A rise in volatile energy prices have helped inflation pick up across the region even though its robust economic growth shows the signs of slowing. The NBH said its underlying inflation measures also showed a pick-up in October, but market participants said it was unlikely to start to tighten policy before next year. The forint briefly touched a 3-month high of 320.9 against the euro just after the inflation figures. Elsewhere in the region, the dinar firmed a shade as the Serbian central bank met. It is expected to keep its benchmark rate on hold at 3 percent. Regional stock indices were mixed, driven by earnings reports. Weaker than expected results drove Hungarian pharmaceuticals Richter down by 2.3 percent, while oil group MOL gained 1.7 percent and Czech lender Komercni Banka firmed by 2 percent. CEE SNAPSHOT AT MARKETS 1501 CET CURRENCI ES Latest Previous Daily Change bid close change in 2018 Czech <EURCZK= 25.9000 25.8810 -0.07% -1.38% crown > Hungary <EURHUF= 321.1900 321.4000 +0.07% -3.20% forint > Polish <EURPLN= 4.2865 4.2885 +0.05% -2.57% zloty > Romanian <EURRON= 4.6599 4.6605 +0.01% +0.42% leu > Croatian <EURHRK= 7.4310 7.4343 +0.04% -0.01% kuna > Serbian <EURRSD= 118.2600 118.3600 +0.08% +0.20% dinar > Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2018 Prague 1082.20 1075.790 +0.60% +0.37% 0 Budapest 38309.55 38198.00 +0.29% -2.71% Warsaw 2268.44 2276.65 -0.36% -7.83% Bucharest 8680.71 8671.98 +0.10% +11.96% Ljubljana <.SBITOP 812.93 807.33 +0.69% +0.81% > Zagreb 1786.31 1783.95 +0.13% -3.07% Belgrade <.BELEX1 749.36 747.15 +0.30% -1.37% 5> Sofia 595.19 592.62 +0.43% -12.14% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=R 1.5300 0.0550 +215bps +5bps R> 5-year <CZ5YT=R 1.8270 -0.0020 +197bps -1bps R> 10-year <CZ10YT= 2.1220 0.0040 +167bps +0bps RR> Poland 2-year <PL2YT=R 1.5830 0.0360 +220bps +3bps R> 5-year <PL5YT=R 2.4910 0.0260 +263bps +2bps R> 10-year <PL10YT= 3.2350 0.0090 +278bps +0bps RR> FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interban k Czech Rep 2.11 2.20 2.46 1.97 <PRIBOR= > Hungary 0.39 0.67 1.04 0.16 Poland 1.77 1.83 1.92 1.72 Note: FRA are for ask prices quotes ************************************************* ************* (Reporting by Sandor Peto; Editing by Toby Chopra)

CEE MARKETS-CEE currencies gain, shielded by euro

Nov 02 2018

By Radu-Sorin Marinas BUCHAREST, Nov 2 Central European currencies recovered on Friday after a one-day Nov. 1 market break, with expectations the euro would in coming months lending them some support. The euro is expected to strengthen and eventually to rise over 2 percent to $1.16 in three months, according to a Reuters poll. However, 80 percent of the strategists polled said risks to predictions were skewed to the downside. Central and eastern European economies are deeply integrated with the euro zone. By 1050 GMT, the Polish Zloty, the Romanian leu and the Czech crown had all risen by 0.1 percent. Hungary remained closed on Friday for a public holiday. Ceska Sporitelna/Erste analysts said the Czech central bank still believes the crown's wandering around unusually weak levels will end within a couple of months. The Czech economy is robust, but recent rate hikes have failed to boost the currency. Market sentiment has turned gloomy for currencies in emerging markets, for a host of reasons. Czech bond yields edged up after the central bank said it was cutting its forecast for the 2018 state fiscal surplus to 1.5 percent of gross domestic product from an earlier estimate of 1.6 percent. CEE SNAPSHOT AT 1200 MARKETS CET CURRENCIE S Latest Previous Daily Change bid close change in 2018 Czech 25.8100 25.8330 +0.09% -1.04% crown Hungary 321.9300 322.6000 +0.18% -3.42% forint Polish 4.3240 4.3280 +0.09% -3.41% zloty Romania 4.6621 4.6630 +0.02% +0.38% n leu Croatia 7.4350 7.4345 -0.01% -0.06% n kuna Serbian 118.2100 118.2000 -0.01% +0.25% dinar Note: calculated from 1800 daily CET change Latest Previous Daily Change close change in 2018 Prague 1069.36 1070.5900 -0.11% -0.82% Budapes 37155.21 37155.21 +0.00% -5.64% t Warsaw 2192.82 2151.88 +1.90% -10.90% Buchare 8544.43 8560.18 -0.18% +10.20% st Ljublja 813.55 794.89 +2.35% +0.89% na Zagreb 1776.87 1779.13 -0.13% -3.58% Belgrad 739.85 740.42 -0.08% -2.63% e Sofia 595.87 596.58 -0.12% -12.04% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republi c 1.5920 0.0400 +223bp +2bps 2-year s 1.8530 0.0050 +202bp -2bps 5-year s <CZ10YT=RR 2.1510 0.0340 +172bp +0bps 10-year > s Poland 1.5930 0.0370 +223bp +2bps 2-year s 2.4670 -0.0050 +263bp -3bps 5-year s <PL10YT=RR 3.2030 -0.0040 +278bp -4bps 10-year > s FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M interbank Czech <P 2.05 2.20 2.35 1.82 Rep RIBOR=> Hungary <B 0.32 0.61 0.96 0.16 UBOR=> Poland <W 1.76 1.82 1.88 1.72 IBOR=> Note: are for ask prices FRA quotes *************************************************** *********** (Editing by Larry King)

CEE MARKETS-Zloty softens, FX watches Italy-EU budget battle

Oct 23 2018

* All eyes on Italy's budget talks with EU * Poland may issue final results of regional polls * Zloty tracks euro falls on Italy woes By Radu-Sorin Marinas BUCHAREST, Oct 23 Poland's zloty eased while other Central European currencies were virtually unchanged in cautious trade on Tuesday due to uncertainties over Italy's budget plans that are to be discussed by the European Commission at a meeting later in the day. Central Europe is tightly integrated economically with the euro zone, and investors are keenly watching for any further market impact arising from Italy's tensions with Brussels over its expansionary spending and overly optimistic projections. The zloty fell 0.2 percent to 4.2981 against the euro by 0932 GMT, the most sensitive among its regional peers to the single currency's moves in response to Italy's budget woes. The Czech crown was flat at 25.83 and the Romanian leu traded virtually flat at 4.6680. Budapest markets were closed for a holiday. "The risk of a challenging attitude by the Italian government continuing looks elevated. Given this, expect the euro to stay on the defensive," ING Bank said in a note. The euro fell towards a two-month low earlier in the day before the talks that could see Brussels take the unprecedented step of rejecting Italy's proposed budget. Stock markets in the region also weakened, led by a 1.30 percent fall for Prague followed by Warsaw with a 1.10 percent decrease. In Poland, final results of Sunday's nationwide ballot for city hall chiefs and provincial assemblies may be published on Tuesday at the earliest. Exit polls showed the eurosceptic Law and Justice (PiS) made only limited gains and lost a high-profile contest for Warsaw mayor. "Warsaw's) ongoing stand-off with the European Commission should prevent the euro/zloty from breaching the 4.20 level until the second quarter of 2019," ING said. CEE SNAPSHOT AT MARKETS 1207 CET CURRENCIE S Latest Previo Daily Change us bid close change in 2018 Czech 25.8300 25.830 +0.00% -1.11% crown 0 Hungary 322.8300 322.79 -0.01% -3.69% forint 00 Polish 4.2981 4.2900 -0.19% -2.83% zloty Romanian 4.6680 4.6665 -0.03% +0.25% leu Croatian 7.4310 7.4320 +0.01% -0.01% kuna Serbian 118.3700 118.45 +0.07% +0.11% dinar 00 Note: calculated from 1800 daily CET change Latest Previo Daily Change us close change in 2018 Prague 1067.22 1081.1 -1.29% -1.01% 800 Budapest 37185.93 37185. +0.00% -5.57% 93 Warsaw 2170.32 2193.0 -1.04% -11.82% 8 Bucharest 8607.57 8615.9 -0.10% +11.01% 5 Ljubljana 813.54 812.66 +0.11% +0.89% Zagreb 1782.67 1787.1 -0.25% -3.27% 6 Belgrade 734.81 739.45 -0.63% -3.29% Sofia 597.30 606.95 -1.59% -11.83% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year 1.5940 0.1020 +223bp +11bps s 5-year 1.8570 -0.004 +201bp +1bps 0 s 10-year <CZ10YT=RR 2.1670 0.0000 +173bp +2bps > s Poland 2-year 1.5550 -0.032 +219bp -3bps 0 s 5-year 2.5090 -0.016 +266bp +0bps 0 s 10-year <PL10YT=RR 3.2280 -0.026 +280bp -1bps > 0 s FORWARD RATE AGREEM ENT 3x6 6x9 9x12 3M interbank Czech Rep <P 2.06 2.24 2.39 1.77 RIBOR=> Hungary <B 0.42 0.72 1.08 0.16 UBOR=> Poland <W 1.76 1.82 1.88 1.72 IBOR=> Note: FRA are for ask prices quotes ************************************************** ************ (Reporting by Radu Marinas; Editing by Kirsten Donovan)

Romanian president reluctantly signs legal reform in 'setback for democracy'

Oct 12 2018

BUCHAREST Romania's president on Friday reluctantly signed off a judicial reform, including a reduction in his own powers, that he called a "setback for Romanian democracy".

Romania's government okays pension overhaul, doubles budget

Oct 10 2018

BUCHAREST Romania's government has approved a plan to more than double state pensions over the next four years for the country's 5.2 million retirees, a move that critics say will put heavy strain on public finances in the long run.

Romanian anti-graft prosecutors should ignore 'easy crimes': government nominee

Oct 08 2018

BUCHAREST Romania's anti-graft prosecutors should focus on "complex" cases, not "easy crimes" such as abuse of office, the government's nominee for chief prosecutor said on Monday.

Romania government picks little-known Florea for chief anti-corruption role

Sep 06 2018

BUCHAREST Romania's justice minister nominated a little-known regional official, Adina Florea, for the post of national anti-corruption prosecutor on Thursday, following the controversial removal of Laura Codruta Kovesi from the post in July.

Romanians rally again in anti-corruption, anti-government protests

Aug 12 2018

BUCHAREST Romanians protested against corruption in Bucharest and major provincial cities for a second day running on Saturday, demanding the Social Democrat government's resignation. | Video

Romania's leftists unveil blueprint to double state pensions

Aug 10 2018

BUCHAREST Romania's Labour Ministry has drafted a plan to more than double state pensions over the next four years for the country's 5.2 million retirees, Minister Olguta Vasilescu said on Friday, a proposal critics deemed unrealistic.

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