* ECB decisions cause some uncertainty, jitters in fx, bonds
* Polish 10-yr yield rises, Hungary's flat after strong
* Polish stocks rise on sale of Unicredit's local unit
* Serbia keeps rates on hold as expected
(Recasts with ECB decisions, market reactions)
By Sandor Peto and Jakub Iglewski
BUDAPEST/WARSAW, Dec 8 Central European
currencies and long-dated government bonds eased on Thursday
after the European Central Bank said it would cut its monthly
asset purchases from April but extend the bond buying until the
end of 2017.
ECB bond purchases in the euro zone have also stoked demand
for assets in the EU's eastern wing.
The ECB said it would cut monthly purchases to 60 billion
euros from the current 80 billion euros.
The decisions caused jitters in markets as investors had
expected purchases to stay at 80 billion but only for six more
The yield on Polish 10-year bonds jumped 7 basis points to
3.61 percent. Hungary's corresponding yield was flat on the day,
but rose 6 basis points from the 3.3 percent average yield set
at an auction earlier on Thursday, which drew robust demand.
Czech yields rose and their curve steepened.
More dovish ECB decisions could have made it more difficult
for the Czech central bank to keep its plan to abandon its cap -
which keeps the crown weaker than 27 against the euro
- in around the middle of 2017.
"So they can still deliver," one dealer said.
The crown is likely to surge through the cap after it is
removed and if ECB policy is loose it would strengthen even more
against the euro.
The ECB's moves created some uncertainty, however. Some
traders interpreted the bank's decisions as further easing.
Others said the ECB was preparing to end its stimulus.
The zloty eased 0.3 percent to 4.4425 against the
euro by 1455 GMT. The forint hit a four-month low past
315 before rebounding to 313.96, still down 0.1 percent from
Piotr Poplawski, senior economist at ING BSK in Warsaw
changed his view after ECB head Mario Draghi said at a news
conference after the bank's policy meeting that "there is no
tapering" in the asset purchases.
"In that case, I think euro/dollar will move further down
and euro/zloty is likely to follow and fall towards 4.38-4.40,"
Warsaw's blue-chip equities index gained 1.7
percent to its highest since April after state-controlled firms
announced they would buy Italian UniCredit's Polish
bank unit and as Germany's stock index jumped.
UniCredit will sell a 33 percent stake in Poland's second
biggest bank Pekao to two Polish state entities
including insurer PZU for $2.6 billion.
Meanwhile Alior, a bank controlled by PZU, walked
away from buying the Polish unit of Austria's Raiffeisen bank.
The stocks of Alior, which earlier bought BPH, another
Polish bank, jumped 10 percent on relief that it will now not
need to issue new shares to finance buying the Raiffeisen unit.
PZU gained almost 4 percent.
The dinar firmed slightly, after Serbia's central
bank kept rates on hold as expected.
CEE SNAPSHOT AT 1555 CET
Latest Previou Daily Change
bid close change in
Czech 27.0310 27.0345 +0.01% -0.12%
Hungary 313.9600 313.640 -0.10% 0.22%
Polish 4.4525 4.4389 -0.31% -4.37%
Romanian 4.5000 4.4985 -0.03% 0.42%
Croatian 7.5350 7.5375 +0.03% 1.38%
Serbian 123.2300 123.380 +0.12% -1.43%
Note: calculate previous close 1800
daily d from at CET
Latest Previou Daily Change
close change in
Prague 899.70 894.24 +0.61% -5.92%
Budapest 30412.01 30152.0 +0.86% +27.1
Warsaw 1921.50 1889.51 +1.69% +3.35
Buchares 6864.83 6874.31 -0.14% -1.99%
Ljubljan 703.87 708.65 -0.67% +1.11
Zagreb 1991.17 1988.47 +0.14% +17.8
Belgrade <.BELEX15 717.08 714.78 +0.32% +11.3
Sofia 579.97 577.02 +0.51% +25.8
Yield Yield Spread Daily
(bid) change vs Bund change
2-year <CZ2YT=RR -0.632 0.093 +006bp +11bp
> s s
5-year <CZ5YT=RR -0.133 0.009 +023bp +1bps
<CZ10YT=R 0.582 0.019 +015bp -7bps
10-year R> s
2-year <PL2YT=RR 1.964 0.032 +266bp +5bps
5-year <PL5YT=RR 2.879 0.025 +324bp +2bps
<PL10YT=R 3.631 0.092 +320bp +1bps
10-year R> s
FORWARD RATE AGREEMENT
3x6 6x9 9x12 3M
Czech < 0.29 0.27 0.26 0
Hungary < 0.37 0.41 0.5 0.41
Poland < 1.755 1.775 1.805 1.73
Note: are for
(Additional reporting from Radu Marinas in Bucharest, Jason
Hovet in Prague and Bartosz Chmielweski in Warsaw; Editing by
Gareth Jones and Susan Fenton)