February 6, 2017 / 11:06 AM / in 6 months

CEE MARKETS-Leu rebounds as political tension eases, zloty surges

8 Min Read

* Romania's leu, stocks up, government repeals graft decree
    * Anti-corruption protests may continue in Bucharest
    * Romania sells more bonds than planned at auction
    * Warsaw leads FX, stocks rise after weak U.S. wages data

 (Adds Romanian auction, kuna retreat)
    By Sandor Peto and Luiza Ilie
    BUDAPEST/BUCHAREST, Feb 6 (Reuters) - The leu rebounded on
Monday as Romania repealed a decree on graft that had triggered
mass protests, while risk appetite rose after weak U.S. wages
data cut the odds the Federal Reserve will hike interest rates
soon.
    Romania's one-month-old Social Democrat government, under
pressure from week-long rallies, on Sunday annulled a decree
that would decriminalize some graft offences. 
    The ruling party said it would continue to support Prime
Minister Sorin Grindeanu. 
    "Markets should read this positively," Simon Quijano-Evans,
strategist of Legal & General Investment Management said in a
note.
    The leu, which hit 7-month lows at 4.554 against
the euro last week, firmed 0.4 percent to 4.5045 by 1337 GMT.
    Investors have also been worried that the government, which
has pledged a better life for Romanians, will lift the budget
deficit above the European Union's ceiling. They continue to
watch the political tension.
    "We still see uncertainty risks creating more downside if
the popular revolt shows no signs of calming down early this
week," Raiffeisen analyst Gintaras Shlizhyus said in a note.   
    After a scrapped Romanian government bond tender last week,
a 5-year bond auction held on Monday was well oversubscribed.
The government sold more paper than planned, letting the average
yield rise to 3.3 percent from 3.15 percent at an auction 3
weeks ago.   
    The government faces a no-confidence vote later this week,
which it is expected to survive thanks to its parliamentary
majority. The Romanian central bank is seen keeping interest
rates on hold at its meeting on Tuesday. 
    The region's most liquid currency, the zloty 
surged 0.7 percent to 4.2775 against the euro, its strongest
levels since October.    
    Warsaw's blue-chip index gained 0.6 percent, while
Bucharest stocks rose 0.7 percent.
    Dealers said American investors were in the frontline of
zloty buying, also fuelled by technical factors, stop-loss deals
and recent upbeat manufacturing activity data.
    The zloty, having crossed 4.3, could head towards 4.267,
said Mateusz Sutowicz, analyst at Bank Millennium in Warsaw.
    "The U.S. wages data makes an early Fed rate hike less
likely and the region's yield advantage helps its assets," one
Budapest-based currency dealer said.
    The forint firmed 0.1 percent to 309.45, moving
off 310, the level around which it has been gravitating for
weeks.
    Hungary's stock index fell one percent as profit-taking
knocked the stocks of drug maker Richter down 3.4
percent after it reported a jump in fourth-quarter profits.
    The kuna eased 0.3 percent, retreating from its
strongest levels since 2012 reached last week. Croatia sold two
domestic bonds late on Friday. 
    
              CEE        SNAPS   AT  1437          
              MARKETS    HOT    CET           
                         CURRENCIES                
                         Lates  Previ  Daily  Chang
                         t      ous           e
                         bid    close  chang  in
                                       e      2017
 Czech crown             27.02  27.02   +0.0  -0.05
                            00     55     2%      %
 Hungary                 309.4  309.7   +0.0  -0.20
 forint                    500    350     9%      %
 Polish                  4.277  4.306   +0.6  2.95%
 zloty                       5      9     9%  
 Romanian                4.504  4.523   +0.4  0.68%
 leu                         5      0     1%  
 Croatian                7.456  7.432  -0.32  1.33%
 kuna                        0      5      %  
 Serbian                 123.7  123.9   +0.1  -0.34
 dinar                     700    800     7%      %
 Note: daily  calculate  previ  close  1800        
 change       d from     ous    at     CET    
                         STOCK                     
                         S                    
                         Lates  Previ  Daily  Chang
                         t      ous           e
                                close  chang  in
                                       e      2017
 Prague                  943.5  943.9  -0.05   +2.3
                             0      9      %     8%
 Budapest                32590  32905  -0.96   +1.8
                           .57    .89      %     4%
 Warsaw                  2087.  2076.   +0.5   +7.1
                            61     12     5%     7%
 Bucharest               7543.  7492.   +0.6   +6.4
                            21     76     7%     7%
 Ljubljana               746.6  744.0   +0.3   +4.0
                             7      9     5%     5%
 Zagreb                  2175.  2170.   +0.2   +9.0
                            78     28     5%     7%
 Belgrade     <.BELEX15  700.1  697.0   +0.4  -2.40
              >              2      7     4%      %
 Sofia                   601.9  603.6  -0.28   +2.6
                             5      2      %     5%
                         BONDS                     
                         Yield  Yield  Sprea  Daily
                                       d      
                         (bid)  chang  vs     chang
                                e      Bund   e in
 Czech                                        sprea
 Republic                                     d
   2-year     <CZ2YT=RR  -0.74  0.021   +002   +5bp
              >              6           bps      s
   5-year     <CZ5YT=RR  -0.06  0.017   +033   +6bp
              >              6           bps      s
   10-year    <CZ10YT=R   0.47  0.022   +011   +7bp
              R>                         bps      s
 Poland                                            
   2-year     <PL2YT=RR  2.179  0.003   +295   +3bp
              >                          bps      s
   5-year     <PL5YT=RR  3.081  -0.01   +348   +3bp
              >                     7    bps      s
   10-year    <PL10YT=R  3.704  -0.06   +334  -2bps
              R>                    8    bps  
              FORWARD    RATE   AGREEMENT          
                         3x6    6x9    9x12   3M
                                              inter
                                              bank
 Czech Rep            <   0.25   0.24   0.27      0
              PRIBOR=>                        
 Hungary              <   0.33   0.45   0.55   0.25
              BUBOR=>                         
 Poland               <  1.765    1.8  1.885   1.73
              WIBOR=>                         
 Note: FRA    are for                              
 quotes       ask                             
              prices                          
 **************************************************
 ************
 
 (Additional reporting by Bartosz Chmielewski in Warsaw; Editing
by Toby Chopra)

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