Reuters logo
CEE MARKETS-Polish bonds catch a chill on ECB tapering concerns
October 5, 2016 / 9:51 AM / a year ago

CEE MARKETS-Polish bonds catch a chill on ECB tapering concerns

* ECB tapering worry dents euro zone debt
    * Long-term CEE bonds ease, Polish 10-year touches 3-month
high
    * Forint firms towards 16-month high against euro
    * Polish central bank keeps rates on hold, says cut is not
mulled

 (Adds Polish central bank decision, forint surge, Czech
auction)
    By Sandor Peto
    BUDAPEST, Oct 5 (Reuters) - Concerns that the European
Central Bank could provide less support to markets spread into
Central Europe on Tuesday, pushing bond yields slightly higher,
especially in Poland.
    Euro zone yields hit two-week highs after Bloomberg reported
that the ECB will probably wind down its monthly asset purchases
in the euro zone before ending the programme in March. An ECB
media officer said the bank had not discussed slowing the
purchases. 
    The impact was felt across central Europe, which has
attracted investors fleeing crushingly low yields in Germany and
elsewhere.
    Market players said Polish yields were likely the most
vulnerable to a pullback, and Citi analysts said they had scaled
back bullish central Europe exposure. Poland's 10-year yield
rose 10 basis points to 2.99 percent, touching a 3-month high.
    Czech yields which are around zero rose by 3-9 basis points
and the Finance Ministry sold less bonds than planned at its
auctions. 
    Six months before the end of the ECB programme it is time to
think of less monetary stimulus, and that is "not a nuke bomb",
a Budapest-fixed income trader said, adding that the region was
less vulnerable than some markets in the euro zone periphery.
    "Central and Eastern Europe, with its political stability
and quite good economic figures, is an island of peace," the
trader added. "True, the Poles have been the bad boys recently,
but markets are getting accustomed to that."
    Poland's central bank held fire at its meeting as expected.
    Its governor Adam Glapinski said rates could stay on hold
until a hike hopefully in early 2018, and said the bank's rate
setters were not considering a cut. 
    The zloty firmed 0.2 percent against the euro by
1515 GMT.
    The forint, buoyed by hopes that Hungary will get
its third credit rating upgrade to investment grade from Moody's
next month, surged 0.8 percent to 305.28, after touching a
15-month high at 304.95.
    Regional stock markets were mixed.
    One Budapest-based currency dealer said investors were
unwinding  deals opened amid a European sell-off last week due
to concerns over the woes of Deutsche Bank, which
have eased.
    "Disaster tourism positions are reversed," the dealer said,
adding that Hungary's strong external accounts and two credit
rating upgrades to investment grade this year did not justify
forint selling.
    
           CEE      SNAP   AT  1715       
           MARKETS  SHOT  CET         
                    CURRENCIES            
                    Late  Prev  Dail  Chan
                    st    ious  y     ge
                    bid   clos  chan  in
                          e     ge    2016
 Czech     <EURCZK  27.0  27.0   +0.  -0.0
 crown     =>        200   200   00%    8%
 Hungary   <EURHUF  305.  307.   +0.  3.07
 forint    =>       2800  7900   82%     %
 Polish    <EURPLN  4.29  4.30   +0.  -0.9
 zloty     =>         70    56   20%    1%
 Romanian  <EURRON  4.46  4.45  -0.0  1.24
 leu       =>         35    98    8%     %
 Croatian  <EURHRK  7.51  7.50  -0.0  1.69
 kuna      =>         20    75    6%     %
 Serbian   <EURRSD  123.  123.   +0.  -1.2
 dinar     =>       0200  0200   00%    6%
 Note:     calcula  prev  clos  1800      
 daily     ted      ious  e at  CET   
 change    from                       
                    STOC                  
                    KS                
                    Late  Prev  Dail  Chan
                    st    ious  y     ge
                          clos  chan  in
                          e     ge    2016
 Prague             881.  875.   +0.  -7.8
                      09    13   68%    7%
 Budapest           2848  2857  -0.2   +19
                    7.05  0.99    9%  .09%
 Warsaw    <.WIG20  1762  1754   +0.  -5.2
           >         .23   .04   47%    1%
 Buchares           6963  6981  -0.2  -0.5
 t                   .66   .98    6%    8%
 Ljubljan  <.SBITO  738.  741.  -0.3   +6.
 a         P>         58    00    3%   09%
 Zagreb    <.CRBEX  1965  1957   +0.   +16
           >         .48   .53   41%  .33%
 Belgrade  <.BELEX  638.  640.  -0.3  -0.8
           15>        44    42    1%    8%
 Sofia     <.SOFIX  508.  509.  -0.1   +10
           >          89    49    2%  .41%
                    BOND                  
                    S                 
                    Yiel  Yiel  Spre  Dail
                    d     d     ad    y
                    (bid  chan  vs    chan
                    )     ge    Bund  ge
                                      in
 Czech                                spre
 Republic                             ad
   2-year  <CZ2YT=  -0.4  0.09   +01   +7b
           RR>        87     2  8bps    ps
   5-year  <CZ5YT=  -0.1  0.03   +03  -2bp
           RR>        41     4  7bps     s
           <CZ10YT  0.33  0.06   +03  -2bp
 10-year   =RR>        5     5  4bps     s
 Poland                                   
   2-year  <PL2YT=  1.75  0.02   +24   +1b
           RR>         8     8  3bps    ps
   5-year  <PL5YT=  2.42  0.09   +29   +4b
           RR>         1     5  3bps    ps
           <PL10YT     3  0.10   +30   +2b
 10-year   =RR>              2  1bps    ps
           FORWARD  RATE  AGREEMENT       
                    3x6   6x9   9x12  3M
                                      inte
                                      rban
                                      k
 Czech     <CZKFRA  0.28  0.25  0.23     0
 Rep       ><PRIBO                    
           R=>                        
 Hungary   <HUFFRA  0.74  0.73  0.75  0.88
           ><BUBOR                    
           =>                         
 Poland    <PLNFRA  1.74  1.73  1.73  1.71
           ><WIBOR                    
           =>                         
 Note:     are for                        
 FRA       ask                        
 quotes    prices                     
 *****************************************
 *********************
 
    

 (Reporting by Sandor Peto; Editing by Mark Trevelyan)

Our Standards:The Thomson Reuters Trust Principles.
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