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Sandor Peto

CEE MARKETS-Zloty eases slightly as Polish retail sales growth slows

6:10am EDT

* Polish retail sales slow in March on Easter effect * Zloty, forint ease slightly, euro remains under pressure * Bond yields track Bunds higher By Sandor Peto and Alan Charlish BUDAPEST/WARSAW, April 23 Central Europe's main currencies eased slightly on Tuesday as retail sales growth in Poland slowed more than expected in March. The region's most liquid units, the zloty and the forint, each fell 0.1 percent by 0852 GMT. They did not follow a strengthening of the rouble driven by a rise in crude prices. The region's economies are oil importers, and are linked to the euro which remains under pressure after last week's weak euro zone purchasing managers' index figures. Poland's annual retail sales growth slowed more than expected to 3.1 percent in March. A more than 20 percent surge in spending on durable goods, however, indicated that consumer demand remained robust, analysts said. "Shops were closed on 4 out of 5 Sundays in the month and secondly ... Easter was later this year than last year, shifting increased purchases into April," said Monika Kurtek, Chief Economist if Bank Pocztowy, explaining the March slowdown. The zloty, trading at 4.2879 versus the euro, was still firmer than its 200- and 90-day moving averages at 4.297. The forint traded at 320.7, staying near the 320 line where it has been hovering since late last month when the Hungarian central bank gave up its earlier guidance of gradual monetary tightening. "I do not expect the bank to do anything at its meeting next week," Raiffeisen analyst Zoltan Torok said. While regional stocks mostly eased slightly, government bonds tracked a rise in Bund yields. Poland's 10-year yield rose 2 basis points to 2.893 from April 18, the last session before the Easter holidays. Moody's affirmed Poland's 'A2' rating and maintained a stable outlook on Friday, saying it did not expect a planned increase in public spending around Polish elections late this year to worsen the outlook. The agency could upgrade both Croatia and Slovenia in reviews due on Friday as the two European Union members' economic and fiscal performance is strong, Raiffeisen analyst Gintaras Shlizhyus said in a note. "In Croatia we remain on Hold due to tight Eurobond valuations though, strategically speaking, Croatia can become next EU-convergence play if its plan to file the ERM-2 application this year gets the EU support," he added. The kuna firmed 0.1 percent versus the euro to 7.424. CEE SNAPSHOT AT MARKETS 1052 CET CURRENCI ES Latest Previous Daily Change bid close change in 2019 Czech <EURCZK= 25.7240 25.7150 -0.03% -0.07% crown > Hungary <EURHUF= 320.7500 320.3900 -0.11% +0.10% forint > Polish <EURPLN= 4.2879 4.2838 -0.10% +0.04% zloty > Romanian <EURRON= 4.7575 4.7570 -0.01% -2.18% leu > Croatian <EURHRK= 7.4240 7.4305 +0.09% -0.19% kuna > Serbian <EURRSD= 117.8900 118.0100 +0.10% +0.35% dinar > Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2019 Prague 1098.17 1101.670 -0.32% +11.31% 0 Budapest 42726.74 42810.11 -0.19% +9.17% Warsaw 2368.42 2365.36 +0.13% +4.03% Bucharest 8383.03 8402.88 -0.24% +13.53% Ljubljana <.SBITOP 880.20 879.35 +0.10% +9.44% > Zagreb 1820.86 1818.63 +0.12% +4.12% Belgrade <.BELEX1 749.00 748.34 +0.09% -1.67% 5> Sofia 572.92 575.29 -0.41% -3.62% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=R 1.7260 -0.1080 +231bps -12bps R> 5-year <CZ5YT=R 1.7180 0.0340 +210bps +2bps R> 10-year <CZ10YT= 1.8430 0.0020 +179bps -3bps RR> Poland 2-year <PL2YT=R 1.6200 -0.0850 +220bps -9bps R> 5-year <PL5YT=R 2.2300 0.0110 +261bps +0bps R> 10-year <PL10YT= 2.9110 0.0220 +286bps -1bps RR> FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interban k Czech Rep 2.19 2.21 2.20 2.02 <PRIBOR= > Hungary 0.32 0.45 0.64 0.16 Poland 1.75 1.76 1.77 1.72 Note: FRA are for ask prices quotes ************************************************* ************* (Reporting by Sandor Peto Editing by Andrew Heavens)

CEE MARKETS-Currencies, bond yields fall on weak euro zone PMIs

Apr 18 2019

* Forint leads CEE fx loss as PMI data hits the euro * Polish industrial output slowed less than expected in March * Government bond yields mostly track Bunds lower By Sandor Peto BUDAPEST, April 18 Central European currencies eased and government bond yields dropped on Thursday after weak manufacturing figures from the euro zone hit the euro and boosted euro zone government bonds. Flash April Purchasing Managers' Index (PMI) figures from Germany, a key export market for Central Europe, showed the manufacturing sector continued to contract, though activity in services picked up. "The euro fell after the figures, and whatever is bad there is not good to us either, so the forint eased," one Budapest-based dealer said. "But the euro may well rebound before the Easter holidays start and the forint may return to where it had been before the figures," the dealer said. The forint, which has been the region's most volatile unit in the past month, led losses, easing 0.3 percent to 320.35 versus the euro by 0855 GMT. It stayed near the 320 level around which it has hovered this week. The zloty weakened by 0.2 percent to 4.2794 against the euro, while the Czech crown shed 0.1 percent. Slowing economic growth in Western European economies are expected to worsen the outlook in the European Union's eastern wing as well. Polish industrial output figures released on Thursday were holding strong and "no major signs of slowdown can be observed so far", Erste analyst Katarzyna Rzentarzewska said in a note. Poland's annual industrial output growth slowed to 5.6 percent in March from 6.9 percent in February, but was above analysts' 4.2 percent forecast. Rzentarewska said the economy could grow by 4.8 percent in the first quarter of the year, only slightly slower than the previous quarter's 4.9 percent. Against the dollar, the zloty's weakening stopped short of the 3.805 level which could open the way towards the past two years' weakest levels around 3.86 , Rabobank FX strategist Piotr Matys said in a note. Government bond yields in the region mostly tracked a drop in Bund yields after the weak euro zone figures. Hungary's 10-year yield fell 6 basis points from Wednesday's fixing to 3.18 percent, while the corresponding Bund yield dropped by 4 basis points to 0.0455 percent. Poland's 10-year yield was lower by 2 basis points at 2.8515 percent. Warsaw and Budapest led a decline in the region's equities indexes, shedding 0.9 percent, with the latter retreating from a record high. Some of the region's markets will be closed on Friday, and most of them on Monday, due to the Easter holidays. CEE SNAPSHOT AT MARKETS 1055 CET CURRENCI ES Latest Previous Daily Change bid close change in 2019 Czech <EURCZK= 25.6900 25.6700 -0.08% +0.07% crown > Hungary <EURHUF= 320.3500 319.4900 -0.27% +0.23% forint > Polish <EURPLN= 4.2794 4.2708 -0.20% +0.24% zloty > Romanian <EURRON= 4.7630 4.7615 -0.03% -2.29% leu > Croatian <EURHRK= 7.4370 7.4373 +0.00% -0.36% kuna > Serbian <EURRSD= 118.0000 117.9900 -0.01% +0.25% dinar > Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2019 Prague 1096.35 1096.970 -0.06% +11.13% 0 Budapest 42628.43 43004.51 -0.87% +8.92% Warsaw 2357.61 2378.31 -0.87% +3.56% Bucharest 8273.73 8271.64 +0.03% +12.05% Ljubljana <.SBITOP 881.29 883.41 -0.24% +9.58% > Zagreb 1804.06 1810.24 -0.34% +3.16% Belgrade <.BELEX1 740.23 747.39 -0.96% -2.82% 5> Sofia 577.36 575.51 +0.32% -2.88% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=R 1.6730 -0.1650 +226bps -17bps R> 5-year <CZ5YT=R 1.7010 0.0150 +208bps +3bps R> 10-year <CZ10YT= 1.8320 -0.0260 +179bps +1bps RR> Poland 2-year <PL2YT=R 1.5970 -0.1210 +218bps -12bps R> 5-year <PL5YT=R 2.2100 -0.0060 +259bps +1bps R> 10-year <PL10YT= 2.8720 -0.0140 +283bps +2bps RR> FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interban k Czech Rep 2.19 2.20 2.20 2.02 <PRIBOR= > Hungary 0.32 0.46 0.64 0.00 Poland 1.75 1.75 1.76 1.72 Note: FRA are for ask prices quotes ************************************************* ************* (Editing by Robin Pomeroy)

CEE MARKETS-Forint outperforms in cautious region ahead of euro zone PMIs

Apr 17 2019

* Volatile forint firms in line with emerging fx index * CEE investors are cautious ahead of key euro zone PMI figures * Warsaw stock index outperforms, partly driven by Santander stock By Sandor Peto BUDAPEST, April 17 The forint set a new 3-week high against the euro on Wednesday, outperforming Central European peers as it benefited from increased appetite for emerging market currencies and stocks. MSCI's indexes for emerging market stocks and currencies rose moderately as an unexpected recovery in China's economy reduced fears of a global slowdown. Currencies in the European Union's eastern states were mostly steady on investor caution ahead of key purchasing managers' indexes (PMI) due on Thursday from the euro zone. Central European economies have lost some steam after robust growth last year and a slump in demand in their main Western export markets, mainly Germany, could slow them further. The forint was 0.2 percent firmer at 319.17 versus the euro by 0848 GMT, in line with the MSCI currency index, while the zloty was flat at 4.2742, near 2-1/2-month highs. Polish wages rose at a robust 5.4 percent annual rate in March, though below analysts' 7.2 percent forecast. The forint has become the region's most volatile unit in the past month, taking the place of the leu, which has calmed down as tax measures which had caused jitters for months in Bucharest markets got watered down. The forint has weakened and has been swinging around the 320 level against the euro after the Hungarian central bank late last month dropped its guidance of gradual policy tightening. March data released since then showed a rise in Hungary's annual inflation near the top of the bank's 2-4 percent target. The forint extended gains on Wednesday after piercing its 100-day moving average in the previous session. "Other emerging market units (are) firm, too... but if euro zone PMIs are weak tomorrow, that will weaken the euro, and through that the forint as well," one Budapest-based dealer said. Regional government bonds mostly tracked a rise in Bund yields, with yields on Poland's 10-year paper trading at 2.876, up 2 basis points. The region's equities indexes were flat or moderately higher. Warsaw's blue-chip index gained more than its peers, adding 0.7 percent, partly driven by a 2.3 percent rise in the shares of Santander Bank Polska to a 14-month high. Its Spanish parent bank, Banco Santander, which plans to combine its custody and asset servicing operations with Credit Agricole, also approached 8-month highs in Madrid. The index of Warsaw-listed banks was near its highest levels in almost three months. CEE SNAPSHOT AT MARKETS 1048 CET CURRENCI ES Latest Previous Daily Change bid close change in 2019 Czech <EURCZK= 25.6660 25.6700 +0.02% +0.16% crown > Hungary <EURHUF= 319.1700 319.7000 +0.17% +0.60% forint > Polish <EURPLN= 4.2742 4.2739 -0.01% +0.36% zloty > Romanian <EURRON= 4.7595 4.7580 -0.03% -2.22% leu > Croatian <EURHRK= 7.4380 7.4363 -0.02% -0.38% kuna > Serbian <EURRSD= 117.8800 117.9100 +0.03% +0.36% dinar > Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2019 Prague 1097.62 1095.900 +0.16% +11.26% 0 Budapest 42867.21 42826.30 +0.10% +9.53% Warsaw 2389.78 2372.18 +0.74% +4.97% Bucharest 8255.84 8247.58 +0.10% +11.81% Ljubljana <.SBITOP 882.78 879.45 +0.38% +9.76% > Zagreb 1808.78 1806.24 +0.14% +3.43% Belgrade <.BELEX1 746.69 739.31 +1.00% -1.97% 5> Sofia 575.50 575.65 -0.03% -3.19% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=R 1.7200 -0.1050 +230bps -10bps R> 5-year <CZ5YT=R 1.7170 0.0470 +207bps +3bps R> 10-year <CZ10YT= 1.8640 0.0100 +178bps -2bps RR> Poland 2-year <PL2YT=R 1.6060 -0.1100 +219bps -11bps R> 5-year <PL5YT=R 2.2240 0.0100 +258bps -1bps R> 10-year <PL10YT= 2.8950 0.0220 +281bps +0bps RR> FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interban k Czech Rep 2.16 2.20 2.19 2.02 <PRIBOR= > Hungary 0.37 0.52 0.71 0.16 Poland 1.75 1.75 1.76 1.72 Note: FRA are for ask prices quotes ************************************************* ************* (Reporting by Sandor Peto; editing by Emelia Sithole-Matarise)

CEE MARKETS-Hungarian bond yields retreat on ECB growth worries

Apr 16 2019

* Forint briefly firms through 100-day moving average * Hungarian bond yields track Bund yields fall, stay lower * Polish fiscal measures support bond yield decline (Recasts with impact of report on ECB rate setter worries, quotes) By Sandor Peto BUDAPEST, April 16 Hungarian government bond yields retreated from multi-week highs on Tuesday as worries over economic slowdown in the European Union's main economies nudged Central European yields lower. The region's yields typically rose in the past few days, tracking Bunds. Mainly Hungarian government bonds were hit as the country's central bank late last month dropped its guidance of gradual policy tightening, and annual inflation rose near the top of the bank's 2.4 percent target range in March. Bund yields fell on Tuesday due to reports that several European Central Bank policymakers regarded the bank's economic projections as too optimistic. The comments, which suggested that monetary policy in the euro zone could remain loose longer, triggered a downwards correction in Hungarian yields. They did not fully track a later rebound in Bund yields. "Understanding the meaning of the ECB story was a far cry and Bund yields rebounded. But Hungarian yields remained lower (than yesterday)," one Budapest-based trader said. Hungary's 10-year yield remained below 4-month highs set on Monday, trading at 3.23 percent, while 5- and 3-month yields were off multi-week highs. TAKEN STRENGTH The forint, which had taken strength from the previous surge in yields, also retreated. It joined a moderate easing of other Central European currencies, returning behind the 320 psychological line against the euro, off a 3-week high set in early trade beyond its 100-day moving average of 319.5. Dealers said technical factors kept the currency near 320. The Hungarian 10-year yield's spread over the corresponding Polish bond was still the highest in more than a month. The Polish yield continued to decline, trading at 2.85 percent, down 2 basis points from Monday and 5 basis points from Friday. Polish bond yields declined on Monday after the government, gearing up for elections late this year, announced new measures to stimulate the economy and generate revenues. The measures include transferring all state-guaranteed private pension funds to individual retirement accounts. "The prospect of GDP growth close to 4 percent and budget deficit seemingly under control could well prove sufficiently attractive for foreign investors to look beyond domestic political ploys and directly at high yielding opportunities in Poland," Rabobank analyst Piotr Matys said in a note. CEE SNAPSHOT AT MARKETS 1611 CET CURRENCI ES Latest Previous Daily Change bid close change in 2019 Czech <EURCZK= 25.6750 25.6360 -0.15% +0.12% crown > Hungary <EURHUF= 320.2500 320.1500 -0.03% +0.26% forint > Polish <EURPLN= 4.2733 4.2718 -0.04% +0.38% zloty > Romanian <EURRON= 4.7610 4.7586 -0.05% -2.25% leu > Croatian <EURHRK= 7.4385 7.4360 -0.03% -0.38% kuna > Serbian <EURRSD= 118.0000 117.9300 -0.06% +0.25% dinar > Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2019 Prague 1094.24 1103.020 -0.80% +10.91% 0 Budapest 42765.09 42815.92 -0.12% +9.26% Warsaw 2367.42 2358.19 +0.39% +3.99% Bucharest 8242.52 8271.75 -0.35% +11.63% Ljubljana <.SBITOP 879.45 882.58 -0.35% +9.35% > Zagreb 1806.24 1817.12 -0.60% +3.28% Belgrade <.BELEX1 739.31 740.59 -0.17% -2.94% 5> Sofia 575.36 575.43 -0.01% -3.21% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=R 1.8350 0.0070 +242bps +1bps R> 5-year <CZ5YT=R 1.6910 0.0100 +207bps +1bps R> 10-year <CZ10YT= 1.8490 0.0010 +179bps -1bps RR> Poland 2-year <PL2YT=R 1.6060 -0.0210 +219bps -2bps R> 5-year <PL5YT=R 2.2100 -0.0070 +259bps -1bps R> 10-year <PL10YT= 2.8730 -0.0200 +281bps -3bps RR> FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interban k Czech Rep 2.16 2.20 2.20 2.02 <PRIBOR= > Hungary 0.36 0.51 0.71 0.16 Poland 1.74 1.75 1.75 1.72 Note: FRA are for ask prices quotes ************************************************* ************* (Additional reporting by Alicja Ptak in Warsaw, Editing by Ed Osmond)

CEE MARKETS-Forint rebounds, boosted by rise in debt yields

Apr 16 2019

* Forint briefly firms through 100-day moving average * Bond yields pause after rise in Budapest, fall in Warsaw By Sandor Peto BUDAPEST, April 16 The forint hit a 3-week high against the euro on Tuesday, rebounding from falls last week caused by data showing a jump in annual inflation in March. A recent surge in Hungarian government bond yields, partly driven by a rise in Bund yields, has made the papers more attractive - even though that rise stalled on Tuesday. "That (yield rise) may be helping the forint too," one Budapest-based dealer said. At a weekly fx swap auction on Monday, the NBH continued to cut forint liquidity provided to banks, but the closely watched 3-month interbank BUBOR rate stayed at 0.16 percent, below the NBH's short-term target at 0.23 percent, another dealer said. The forint strengthened to break through 320 against the euro and briefly firmed further through its 100-day moving average of 319.5. It retreated to 319.91 by 0921 GMT, still firmer by 0.1 percent on the day, while its Central European peers eased slightly. The zloty shed less than 0.1 percent, after the Polish finance ministry projected a slowdown in economic growth to 3.3 percent by 2022 from about 4 percent this year. The yield on Hungary's 10-year government bond yield dropped 1 basis point to 3.24 percent, off Monday's 4-month highs reached after a 40 basis point rise in three weeks. Its spread over Poland's corresponding yield, which traded flat at 2.87 percent, stayed near Monday's 5-week highs. Polish bond yields took a breather after a decline on Monday which brought the spread of the 10-year yield over the corresponding Bund to a 4-week low at 282 basis points. The fall followed an announcement from the government, which is gearing up for elections late this year, of changes in the pension system next year, including transferring all state-guaranteed private pension funds to individual retirement accounts. Along with tax changes, the measures reduce the risk that Poland's budget deficit will breach the European Union's ceiling, 3 percent of economic output, next year, Santander analysts said in a note. The region's equities markets were mixed and rangebound. Budapest's main index rose, driven by a 2.6 percent jump in the shares of pharmaceuticals Richter, after JP Morgan raised its price target for the share. Prague's index was knocked down by a 4.3 percent fall in the shares of Komercni Banka which started trading without a dividend sheet. CEE SNAPSHOT AT MARKETS 1121 CET CURRENCI ES Latest Previous Daily Change bid close change in 2019 Czech <EURCZK= 25.6450 25.6360 -0.04% +0.24% crown > Hungary <EURHUF= 319.9100 320.1500 +0.08% +0.37% forint > Polish <EURPLN= 4.2747 4.2718 -0.07% +0.35% zloty > Romanian <EURRON= 4.7595 4.7586 -0.02% -2.22% leu > Croatian <EURHRK= 7.4370 7.4360 -0.01% -0.36% kuna > Serbian <EURRSD= 118.0000 117.9300 -0.06% +0.25% dinar > Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2019 Prague 1093.37 1103.020 -0.87% +10.83% 0 Budapest 42928.59 42815.92 +0.26% +9.68% Warsaw 2364.36 2358.19 +0.26% +3.85% Bucharest 8243.09 8271.75 -0.35% +11.64% Ljubljana <.SBITOP 877.77 882.58 -0.54% +9.14% > Zagreb 1806.55 1817.12 -0.58% +3.30% Belgrade <.BELEX1 741.07 740.59 +0.06% -2.71% 5> Sofia 576.66 575.43 +0.21% -2.99% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=R 1.6820 -0.1460 +227bps -14bps R> 5-year <CZ5YT=R 1.7010 0.0200 +208bps +2bps R> 10-year <CZ10YT= 1.8650 0.0170 +181bps +2bps RR> Poland 2-year <PL2YT=R 1.6090 -0.0180 +220bps -1bps R> 5-year <PL5YT=R 2.2120 -0.0050 +259bps +0bps R> 10-year <PL10YT= 2.8870 -0.0060 +283bps -1bps RR> FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interban k Czech Rep 2.16 2.20 2.20 2.02 <PRIBOR= > Hungary 0.36 0.53 0.73 0.16 Poland 1.74 1.74 1.75 1.72 Note: FRA are for ask prices quotes ************************************************* ************* (Additional reporting by Alicja Ptak in Warsaw)

CEE MARKETS-Forint rebounds, Hungary's 10-year yield sets 4-month high

Apr 15 2019

* Forint tracks rebound in global risk-on mood * Hungarian construction data underpin GDP output growth * Hungarian 10-year bond yield spread over Bunds sets 5-month-high (Updates prices) By Sandor Peto BUDAPEST, April 15 The forint gained on Monday, benefiting from increased appetite for risky assets, while a rise in inflation in Central Europe boosted Hungary's 10-year government bond yield to a 4-month high. Money flowed from safe-haven currencies into riskier units globally, and the dollar also retreated, with its selling helping currencies in the European Union. The forint bounced from Friday's 3-month low against its main Central European peer, the zloty. It firmed a third of a percent versus the euro, approaching the 320 psychological line, after piercing its 200-day moving average at 320.90. The forint has underperformed in recent weeks because rising consumer prices across the region brought Hungary's annual inflation near the top of the central bank's 2 to 4 percent target range by March. The Polish rate, confirmed at 1.7 percent on Monday, is near the bottom of its 1.5 to 3.5 percent target range. Hungary's central bank (NBH) raised one of its interest rates on March 26, but dropped its guidance of gradual monetary tightening, saying that its policy would hinge on data. Hungarian construction output jumped by 48 percent in annual terms in February, according to figures released on Monday. Along with a pick-up in industrial output and retail sales, the figures indicate that annual economic growth may have accelerated above 5 percent in the first quarter of the year, Takarekbank analyst Gergely Suppan said in a note. The less hawkish central bank rhetoric and a rise in inflation and German Bund yields have pushed Hungary's 10-year yield higher by about 40 basis points in the past three weeks. Foreign investors have reduced their forint-denominated government bond holding to a 4-week low. Rising 3 basis points on Monday, the yield set a 4-month high. In the past days it rose more than corresponding Bunds, and its spread over the German paper was the highest in 5 months. "German yields have increased, too, and last week's inflation figures had an impact (on Hungarian bonds) as well," one Budapest-based trader said. Poland's corresponding yield dropped 2 basis points to 2.8785 percent, while the zloty firmed 0.1 percent 4.275 versus the euro, slightly off a 2-and-1/2-month high set earlier in the session. Polish debt yields fell due to the announcement of an overhaul of pension funds which could lower the government's borrowing needs in years to come, but can increase government spending in the long run, Erste group analysts said in a note. CEE SNAPSHOT AT MARKETS 1645 CET CURRENCI ES Latest Previous Daily Change bid close change in 2019 Czech <EURCZK= 25.6440 25.6150 -0.11% +0.25% crown > Hungary <EURHUF= 320.4000 321.5000 +0.34% +0.21% forint > Polish <EURPLN= 4.2750 4.2776 +0.06% +0.34% zloty > Romanian <EURRON= 4.7600 4.7595 -0.01% -2.23% leu > Croatian <EURHRK= 7.4380 7.4345 -0.05% -0.38% kuna > Serbian <EURRSD= 118.0000 118.0000 +0.00% +0.25% dinar > Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2019 Prague 1103.02 1104.470 -0.13% +11.80% 0 Budapest 42774.44 42940.74 -0.39% +9.29% Warsaw 2356.08 2366.71 -0.45% +3.49% Bucharest 8269.96 8267.38 +0.03% +12.00% Ljubljana <.SBITOP 882.58 881.14 +0.16% +9.74% > Zagreb 1817.12 1806.50 +0.59% +3.91% Belgrade <.BELEX1 740.59 736.32 +0.58% -2.77% 5> Sofia 575.43 575.13 +0.05% -3.20% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=R 1.6510 -0.1700 +223bps -16bps R> 5-year <CZ5YT=R 1.6930 0.0150 +206bps +1bps R> 10-year <CZ10YT= 1.8670 0.0360 +181bps +3bps RR> Poland 2-year <PL2YT=R 1.6290 -0.0450 +221bps -4bps R> 5-year <PL5YT=R 2.2160 -0.0260 +259bps -3bps R> 10-year <PL10YT= 2.8950 -0.0180 +284bps -2bps RR> FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interban k Czech Rep 2.16 2.20 2.19 2.02 <PRIBOR= > Hungary 0.37 0.54 0.74 0.16 Poland 1.74 1.75 1.76 1.72 Note: FRA are for ask prices quotes ************************************************* ************* (Reporting by Sandor Peto, editing by Larry King and Toby Chopra)

CEE MARKETS-Forint tracks CEE FX rebound, off three-month low vs zloty

Apr 15 2019

* Forint tracks rebound in global risk-on mood * Hungarian construction data underpin GDP output growth * FX turnovers are low, stocks and bonds are range-bound By Sandor Peto BUDAPEST, April 15 The forint gained on Monday, benefiting from a global flow of money from safe-haven currencies into more risky assets. Other Central European currencies like the zloty had gained late on Friday as traders sold dollars. The euro also gained, and its strength helped currencies in the European Union's eastern wing. A delay in Britain's exit from the European Union helped sentiment. "The market has calmed down concerning Brexit and we are also past the comments from the ECB and Fed: a calmer week starts, which alone can justified some (forint) firming after a weakening," one Budapest-based currency dealer said. The forint rose 0.2 percent against the euro to 320.8, moving to the stronger side of its 200-day moving average for the first time in more than three weeks. Against the zloty, the Hungarian currency rebounded from three-month lows set on Friday. The forint underperformed in recent weeks because rising consumer prices across the region brought Hungary's annual inflation near the top of the central bank's 2 to 4 percent target range by March. The Polish rate, confirmed at 1.7 percent on Monday, is near the bottom of its 1.5 to 3.5 percent target range. Hungary's central bank raised one of its interest rates on March 26, but dropped its guidance of gradual monetary tightening, saying that its policy would hinge on data. Hungarian construction output jumped by 48 percent in annual terms in February, according to figures released on Monday. Along with a pick-up in industrial output and retail sales, the figures indicate that annual economic growth may have accelerated above 5 percent in the first quarter of the year, Takarekbank analyst Gergely Suppan said in a note. Turnover in the region's currency markets, however, remains quite low as other emerging markets provide better news pegs for trading, dealers said. Regional equities, mirroring their Western European peers, were range-bound and mixed, similar to government bonds. Yields on Romanian leu-denominated bonds were mixed, after the finance ministry said late on Friday that the government planned to tap foreign markets for further issues worth 5.25 billion euros ($5.94 billion) this year and next. The 10-year debt traded around 4.92 percent, up 1 basis point, and the benchmark overnight interbank rate was bid at its highest level in commercial banks' one-month reserve period, at 3.26 percent. CEE SNAPSHOT AT MARKETS 1114 CET CURRENCI ES Latest Previous Daily Change bid close change in 2019 Czech <EURCZK= 25.6250 25.6150 -0.04% +0.32% crown > Hungary <EURHUF= 320.8000 321.5000 +0.22% +0.09% forint > Polish <EURPLN= 4.2760 4.2776 +0.04% +0.32% zloty > Romanian <EURRON= 4.7614 4.7595 -0.04% -2.26% leu > Croatian <EURHRK= 7.4380 7.4345 -0.05% -0.38% kuna > Serbian <EURRSD= 118.0000 118.0000 +0.00% +0.25% dinar > Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2019 Prague 1105.06 1104.470 +0.05% +12.01% 0 Budapest 42833.77 42940.74 -0.25% +9.44% Warsaw 2361.50 2366.71 -0.22% +3.73% Bucharest 8288.81 8267.38 +0.26% +12.26% Ljubljana <.SBITOP 887.18 881.14 +0.69% +10.31% > Zagreb 1805.76 1806.50 -0.04% +3.26% Belgrade <.BELEX1 737.61 736.32 +0.18% -3.16% 5> Sofia 575.50 575.13 +0.06% -3.19% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=R 1.6860 -0.1350 +226bps -14bps R> 5-year <CZ5YT=R 1.7000 0.0220 +207bps +2bps R> 10-year <CZ10YT= 1.8420 0.0110 +178bps +0bps RR> Poland 2-year <PL2YT=R 1.6700 -0.0040 +224bps -1bps R> 5-year <PL5YT=R 2.2300 -0.0120 +260bps -2bps R> 10-year <PL10YT= 2.9190 0.0060 +286bps +0bps RR> FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interban k Czech Rep 2.16 2.20 2.19 2.02 <PRIBOR= > Hungary 0.37 0.54 0.74 0.16 Poland 1.75 1.75 1.75 1.72 Note: FRA are for ask prices quotes ************************************************* ************* (Reporting by Sandor Peto, editing by Larry King)

CEE MARKETS-Currencies ease on euro bounce, stocks join European rise

Apr 12 2019

* Currencies slightly weaker in thin turnover * Dollar flows into EU do not reach the region -dealer * Hungarian and Polish yields track rise in Bunds By Sandor Peto BUDAPEST, April 12 Central European currencies and government bonds eased on Friday amid a flow of money into the euro, government bonds in the euro zone peripheries and European stocks. In the past two years dollar selling usually supported Central European currencies and they were sold along with other emerging market assets when there was dollar buying. "That (correlation) does not work now because the flow into euro zone assets is not huge and does not get here, while investors generally do not have much interest in our region right now," one Budapest-based dealer said. "This is a breeze rather than a storm." The euro gained in a move dealers said could have been driven by expected currency demand arising from a Japanese bank's plans to purchase a German multibillion-dollar aviation finance business. Currencies in the European Union's eastern wing eased less than 0.1 percent against the euro, with the exception of the dinar, which firmed a shade to 117.91. The forint tested three-month lows near 322.50 versus the euro before rebounding to 322.35. If it pierces technical resistance at 322.80, it could weaken to 325, Erste analysts said in a note. It fell in recent weeks after the National Bank of Hungary last month dropped its earlier guidance of gradual monetary tightening and inflation data released in the region this week showed a rise in inflation. The Czech crown also eased slightly, to 25.63 versus the euro, but stayed near the three-week highs set after Czech figures showed a rise in inflation to 3 percent, the top of the Czech central bank's (CNB) target range. "We continue to expect the CNB to deliver another rate hike in the second half of this year," KBC analysts said in a note. By that time the bank will have a clearer picture on the scope of economic slowdown in Western European export markets, the analysts added. Stocks in the region mostly tracked a rise for Western European peers. Budapest's main equities index, mainly driven by a 1.5 percent rise in oil group MOL, set a record high. Hungarian and Polish government bond yields tracked a rise in Bund yields, ignoring a decline in some bond yields in the euro zone's peripheries. Romanian bonds yields, however, retreated after this week's earlier boost from a rise in inflation. The 10-year paper was trading around 4.93 percent, off Thursday's 10-week highs. CEE SNAPSHOT AT MARKETS 1159 CET CURRENCI ES Latest Previous Daily Change bid close change in 2019 Czech <EURCZK= 25.6300 25.6200 -0.04% +0.30% crown > Hungary <EURHUF= 322.3500 322.1900 -0.05% -0.39% forint > Polish <EURPLN= 4.2863 4.2827 -0.08% +0.08% zloty > Romanian <EURRON= 4.7585 4.7550 -0.07% -2.20% leu > Croatian <EURHRK= 7.4350 7.4335 -0.02% -0.34% kuna > Serbian <EURRSD= 117.9100 118.0000 +0.08% +0.33% dinar > Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2019 Prague 1094.98 1091.030 +0.36% +10.99% 0 Budapest 42848.79 42693.52 +0.36% +9.48% Warsaw 2378.27 2374.97 +0.14% +4.46% Bucharest 8310.67 8328.02 -0.21% +12.55% Ljubljana <.SBITOP 884.29 883.93 +0.04% +9.95% > Zagreb 1809.04 1808.53 +0.03% +3.44% Belgrade <.BELEX1 738.55 736.14 +0.33% -3.04% 5> Sofia 573.65 579.03 -0.93% -3.50% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=R 1.6410 -0.1880 +223bps -19bps R> 5-year <CZ5YT=R 1.6760 -0.0020 +208bps -2bps R> 10-year <CZ10YT= 1.8310 0.0000 +181bps -3bps RR> Poland 2-year <PL2YT=R 1.6650 0.0010 +226bps +0bps R> 5-year <PL5YT=R 2.2410 0.0070 +264bps -2bps R> 10-year <PL10YT= 0.2820 -2.6280 +026bps -265bps RR> FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interban k Czech Rep 2.16 2.20 2.19 2.02 <PRIBOR= > Hungary 0.35 0.52 0.70 0.16 Poland 1.75 1.75 1.75 1.72 Note: FRA are for ask prices quotes ************************************************* ************* (Reporting by Sandor Peto Editing by David Goodman )

CEE MARKETS-Hungarian, Romanian bond yields rise on inflation worry

Apr 11 2019

* Romanian 10-year yield spread over Bunds is widest since 2012 * Inflation in CEE is highest in Budapest, Bucharest * ECB, Fed outlooks give temporary relief to Hungarian bonds (Recasts with Hungarian bond auction result, Romanian bond yield rise) By Sandor Peto BUDAPEST, April 11 Romania's 10-year government bond yields reached their widest spread over Bunds since 2012 on Thursday and Hungarian bond yields rose amid worries over a rise in inflation in Central Europe. A surge in wages is driving consumption and economic growth in the European Union's eastern wing. It has also contributed to a renewed rise in inflation this year. March figures published in the past days showed that annual inflation approached the top of central bank target ranges in the Czech Republic and Hungary and exceeded it in Romania. Comments by he European Central Bank and the Federal Reserve signaling no tightening in policy made the region's currencies and bonds relatively more attractive, but also fueled worries over economic growth. The comments gave some relief to the region's government bonds on Wednesday, but Hungarian and Romanian yields resumed a rise on Thursday. Hungary's bi-weekly government bond auctions drew healthy demand, but yields rose by 3 to 4 basis points, regaining the ground lost on Wednesday. "It is like Romania: they also had bad inflation figures and investors have not digested them yet," one Budapest-based fixed income dealer said. The prospect of loose monetary policy in the euro zone and the United States allows more accommodative conditions in the region as well, but high inflation figures still fuel worries. Romania and Hungary have the highest inflation rates in the region, at 4 and 3.7 percent, respectively, while Hungary has the lowest central bank benchmark rate at 0.9 percent. Romania's government bond yields rose 6 to 8 basis points. The 10-year yield, trading around 4.95 percent, was almost 5 percentage point above its German peer, its largest spread since late 2012. Romania's spiraling inflation and budget and current account deficits draw concern, weighing on its bond prices, Raiffeisen analyst Gintaras Shlizhyus said in a note. The leu eased slightly to 4.7575 against the euro by 1413 GMT. The ROBOR overnight interbank interest rate, which indicates how tight liquidity conditions are, was lower at 3.17 percent, but still above its one-year moving average of 1.95 percent. Elsewhere, the forint weakened by a quarter of a percent to 321.95 versus the euro. CEE SNAPSHOT AT MARKETS 1613 CET CURRENCI ES Latest Previous Daily Change bid close change in 2019 Czech <EURCZK= 25.6100 25.5900 -0.08% +0.38% crown > Hungary <EURHUF= 321.9500 321.1500 -0.25% -0.27% forint > Polish <EURPLN= 4.2825 4.2800 -0.06% +0.17% zloty > Romanian <EURRON= 4.7575 4.7556 -0.04% -2.18% leu > Croatian <EURHRK= 7.4335 7.4270 -0.09% -0.32% kuna > Serbian <EURRSD= 118.0100 118.0500 +0.03% +0.25% dinar > Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2019 Prague 1090.70 1086.270 +0.41% +10.56% 0 Budapest 42449.77 42225.87 +0.53% +8.46% Warsaw 2372.32 2391.80 -0.81% +4.20% Bucharest 8304.62 8304.90 -0.00% +12.47% Ljubljana <.SBITOP 883.75 874.33 +1.08% +9.88% > Zagreb 1808.53 1805.33 +0.18% +3.41% Belgrade <.BELEX1 736.14 739.29 -0.43% -3.35% 5> Sofia 579.03 583.32 -0.74% -2.60% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=R 1.7150 -0.0990 +230bps -10bps R> 5-year <CZ5YT=R 1.6630 -0.0340 +213bps -5bps R> 10-year <CZ10YT= 1.8370 0.0080 +185bps -1bps RR> Poland 2-year <PL2YT=R 1.6530 -0.1140 +224bps -12bps R> 5-year <PL5YT=R 2.2280 0.0070 +269bps -1bps R> 10-year <PL10YT= 2.9060 0.0010 +292bps -2bps RR> FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interban k Czech Rep 2.15 2.19 2.18 2.02 <PRIBOR= > Hungary 0.34 0.50 0.68 0.16 Poland 1.73 1.73 1.74 1.72 Note: FRA are for ask prices quotes ************************************************* ************* (Reporting by Sandor Peto, editing by Larry King)

CEE MARKETS-Hungarian yields rebound after auction, tracking euro zone bonds

Apr 11 2019

By Sandor Peto BUDAPEST, April 11 Hungarian government bond yields rose as the government held its bi-weekly auction on Thursday, tracking euro zone yields. Safe-haven German yields also edged up after European Union leaders gave Britain a six-month extension to leave the bloc, meaning it will not crash out on Friday without a withdrawal deal. Hungarian yields rose by 3-4 basis points across the curve. The 5-year paper was sold at an average yield of 2.09 percent at the auction which drew healthy demand, and the government sold more papers than its original offer. For most of the week, Hungarian bond yields traded near multi-week highs, before dovish comments from the European Central Bank late on Wednesday knocked Hungary's yield curve down by 5-6 basis points. The forint gave up some ground against the euro zone, in line with its regional peers, after a strengthening in the previous session partly due to figures showing a pick-up in inflation in the region. Comments from the ECB and the Fed signaling no tightening in policy also made the region's currencies and bonds relatively more attractive, but also fueled worries over economic growth. While Czech government bond yields were mostly flat, Romanian yields continued to rise. The 10-year yield rose 6 basis points to 4.95 percent, its highest level since late January. Romania's spiraling inflation, which reached 4 percent according to March data released on Wednesday, and imbalances in its economy draw concern, weighing on its bond prices, Raiffeisen analyst Gintaras Shlizhyus said in a note. "With domestic economy likely on its way to a slowdown another (central bank) rate hike may be unhelpful, so the regulator would be likely to direct its attention to RON (leu) liquidity controls, which can negatively affect ROMGBs," he said. The leu eased slightly to 4.7595 against the euro by 0953 GMT. The ROBOR overnight interbank interest rate was slightly lower, at 3.17 percent. CEE SNAPSHOT AT MARKETS 1153 CET CURRENCI ES Latest Previous Daily Change bid close change in 2019 Hungary <EURHUF= 321.3000 321.1500 -0.05% -0.07% forint > Polish <EURPLN= 4.2810 4.2800 -0.02% +0.20% zloty > Romanian <EURRON= 4.7595 4.7556 -0.08% -2.22% leu > Croatian <EURHRK= 7.4290 7.4270 -0.03% -0.26% kuna > Serbian <EURRSD= 117.9000 118.0500 +0.13% +0.34% dinar > Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2019 Prague 1088.07 1086.270 +0.17% +10.29% 0 Budapest 42389.51 42225.87 +0.39% +8.31% Warsaw 2384.59 2391.80 -0.30% +4.74% Bucharest 8301.39 8304.90 -0.04% +12.43% Ljubljana <.SBITOP 880.52 874.33 +0.71% +9.48% > Zagreb 1806.58 1805.33 +0.07% +3.30% Belgrade <.BELEX1 737.65 739.29 -0.22% -3.16% 5> Sofia 582.14 583.32 -0.20% -2.07% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=R 1.6530 -0.1610 +224bps -16bps R> 5-year <CZ5YT=R 1.6910 -0.0050 +216bps -1bps R> 10-year <CZ10YT= 1.8110 0.0000 +184bps -1bps RR> Poland 2-year <PL2YT=R 1.6430 -0.1240 +223bps -12bps R> 5-year <PL5YT=R 2.2140 -0.0070 +268bps -2bps R> 10-year <PL10YT= 2.9050 0.0000 +293bps -1bps RR> FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interban k Czech Rep 2.15 2.19 2.18 2.02 <PRIBOR= > Hungary 0.34 0.50 0.68 0.16 Poland 1.74 1.73 1.74 1.72 Note: FRA are for ask prices quotes ************************************************* ************* (Reporting by Sandor Peto, editing by Mike Harrison)

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