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CEE MARKETS-Kuna joins firming despite Croatian government crisis
April 28, 2017 / 9:53 AM / 6 months ago

CEE MARKETS-Kuna joins firming despite Croatian government crisis

    * Kuna rebounds from 3-month-low on seasonal tourism impact
    * Croatian government splits over Agrokor crisis
    * French politics supports FX despite Macron Poland warning
    * Czech crown rebounds again from levels beyond 27 vs euro

    By Sandor Peto and Igor Ilic
    BUDAPEST/ZAGREB, April 28 (Reuters) - Croatia's kuna joined
a firming of Central European peers on Friday despite a split in
the country's ruling coalition, helped by seasonal factors and
more risk appetite after last Sunday's French presidential vote.
    Regional assets rose this week after centrist Emmanuel
Macron won the first-round vote, diminishing the risk of
far-right or far-left government in the core European Union
member.
    In Zagreb, the kuna hit a 3-month low to the euro
on Thursday, after Prime Minister Andrej Plenkovic fired
ministers from his junior coalition partner. He will need to
patch together a new majority or call an early election.

    It rebounded on Friday, trading at 7.48, up 0.1 percent.
    The coalition split stems from differences over the handling
of a financial crisis of retail and food group Agrokor,
Croatia's biggest private firm.
    Analysts said a seasonal pick-up in revenues from tourism,
which tends to lift the kuna around the middle of the year,
still supported the currency.
    "I expect certain easing pressures to persist in the coming
days or weeks due to the Agrokor crisis and political
uncertainties, but as the tourist season gets into swing from
June, I see again appreciation pressures setting the pace," said
a dealer at a major local bank.
    Increased demand for euros as the corporate sector pays
dividends is negative, but a pick-up in the inflow of EU funds
could help the kuna, Addiko bank said in a note.
    The zloty and the forint firmed 0.1
percent per euro. The Polish unit touched a one-month high at
4.2133, a hairbreadth from 18-month highs beyond 4.21.
    Macron, who has good chances to become French president,
pledged a hard-line approach to Poland and Hungary in defence of
democratic values late on Thursday.
    But investors shrug off that tension for now, focusing on a 
fall in risks to European integration with Macron in the lead.
    Polish April inflation data due at 1200 GMT are seen showing
 2 percent annual rise, a flat rate from March.
    "CPI data will not have a significant impact on zloty, given
a prevailing conviction ... that the MPC (central bank) will
remain dovish in its stance," Millennium bank analysts said in a
note.
    The crown firmed 0.4 percent to 26.915 per euro,
rebounding sharply from levels past 27, which it reached on
Thursday for the second time since the central bank three weeks
ago removed a cap which had kept it weaker than 27 for years.
    
              CEE        SNAPS   AT  1046          
              MARKETS    HOT    CET           
                         CURRENCIES                
                         Lates  Previ  Daily  Chang
                         t      ous           e
                         bid    close  chang  in
                                       e      2017
 Czech crown             26.91  27.02   +0.4  0.34%
                            50     45     1%  
 Hungary                 311.5  311.8   +0.1  -0.88
 forint                    700    750     0%      %
 Polish                  4.218  4.223   +0.1  4.41%
 zloty                       0      3     2%  
 Romanian                4.534  4.533  -0.01  0.02%
 leu                         0      7      %  
 Croatian                7.480  7.483   +0.0  1.00%
 kuna                        0      8     5%  
 Serbian                 123.0  123.2   +0.1  0.28%
 dinar                     000    000     6%  
 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                  1003.  1002.   +0.1   +8.8
                            43     12     3%     8%
 Budapest                32959  32959   +0.0   +2.9
                           .04    .62     0%     9%
 Warsaw                  2390.  2382.   +0.3   +22.
                            10     78     1%    70%
 Bucharest               8202.  8184.   +0.2   +15.
                            86     77     2%    78%
 Ljubljana               780.9  788.2  -0.92   +8.8
                             9      5      %     4%
 Zagreb                  1899.  1888.   +0.5  -4.78
                            42     86     6%      %
 Belgrade     <.BELEX15  728.7  728.9  -0.02   +1.5
              >              6      4      %     9%
 Sofia                   654.3  649.4   +0.7   +11.
                             9      7     6%    59%
                         BONDS                     
                         Yield  Yield  Sprea  Daily
                                       d      
                         (bid)  chang  vs     chang
                                e      Bund   e in
 Czech                                        sprea
 Republic                                     d
   2-year     <CZ2YT=RR  0.027  -0.01   +076  -3bps
              >                     8    bps  
   5-year     <CZ5YT=RR  0.192  -0.00   +058  -1bps
              >                     4    bps  
   10-year    <CZ10YT=R  0.882  -0.10   +056  -12bp
              R>                    6    bps      s
 Poland                                            
   2-year     <PL2YT=RR   1.98   0.01   +271   +0bp
              >                          bps      s
   5-year     <PL5YT=RR  2.877  0.021   +327   +1bp
              >                          bps      s
   10-year    <PL10YT=R  3.425  0.027   +311   +1bp
              R>                         bps      s
              FORWARD    RATE   AGREEMENT          
                         3x6    6x9    9x12   3M
                                              inter
                                              bank
 Czech Rep            <   0.31   0.37   0.46      0
              PRIBOR=>                        
 Hungary              <   0.22  0.255   0.39   0.16
              BUBOR=>                         
 Poland               <  1.753  1.779  1.829   1.73
              WIBOR=>                         
 Note: FRA    are for                              
 quotes       ask                             
              prices                          
 **************************************************
 ************
 
 (Additional reporting by Jason Hovet in Prague and Marcin
Goettig and Bartosz Chmielewski in Warsaw; Editing by Tom
Heneghan)
  
 
 

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