* Bucharest stock index reaches highest level since Jan 2008
* Romanian committees to discuss wage hike bill
* CEE markets are rangebound with UK and U.S. closed
By Sandor Peto and Luiza Ilie
BUDAPEST/BUCHAREST, May 29 Bucharest stocks
touched a new nine-year high on Monday, buoyed by healthy
first-quarter company earnings, despite concerns that wage hikes
and tax cuts will exacerbate Romania's budget deficit.
Other central European stock indices and currencies were
treading water amid a lack of major domestic news and due to
bank holidays in the United Kingdom and the United States.
Bucharest's main index was flat at 0839 GMT, a bit
off its morning peak which was also its highest level since
Committees in the Romanian parliament's lower house are due
to discuss on Monday a bill to lift public sector wages further,
which parliament is expected to pass before its summer recess
starts next month.
The debate about the bill, "its implementation, timing and
the budget impact, should be closely monitored," Bucharest-based
ING analysts said in a note.
Romania has led a surge in wages in the region as employers
including governments fight an exodus of young skilled workers
to richer, Western European Union (EU) members.
January-April budget data have shown a surplus, but the EU,
the International Monetary Fund and the local fiscal council
came out last week to express concern that the government's
policies will lead to a wide deficit.
Finance Minister Viorel Stefan told Reuters in an interview
late on Friday that the government would press ahead with tax
cuts next year as the economy could continue to grow at a robust
rate of over 5 percent this year.
Growth in the EU's eastern members has generally picked up
in the first quarter, but central bankers have not appeared
worried over inflation so far.
Regional stock indices are trading near multi-year highs.
Its main currencies are also trading near multi-month or
multi-year highs, except for the leu which has been
underperforming due to the concerns over the Romanian budget.
May Purchasing Managers' Index (PMI) figures due on Thursday
are expected to confirm robust growth in the region but may not
boost regional currencies much more.
"Current strong CE FX rates (with CE currencies among the
strongest emerging market currencies in recent weeks, partially
supported by the ongoing EUR strength) already mirror the
economic improvements visible over the past months," said
Raiffeisen analyst Wolfgang Ernst in a note.
Regional currencies were mixed, with the zloty
firming slightly against the euro, while the Czech crown
, the forint and the leu shed about
CEE MARKETS SNAPSH AT 1039 CET
Latest Previo Daily Change
bid close change in
Czech crown 26.480 26.454 -0.10% 1.99%
Hungary 307.50 307.41 -0.03% 0.43%
forint 00 00
Polish zloty 4.1820 4.1828 +0.02 5.31%
Romanian leu 4.5625 4.5604 -0.05% -0.60%
Croatian kuna 7.4190 7.4235 +0.06 1.83%
Serbian dinar 122.59 122.69 +0.08 0.62%
00 00 %
Note: daily calculated previo close 1800
change from us at CET
Latest Previo Daily Change
close change in
Prague 1013.9 1016.2 -0.22% +10.0
9 4 2%
Budapest 34214. 34358. -0.42% +6.91
22 93 %
Warsaw 2327.1 2326.2 +0.04 +19.4
3 8 % 7%
Bucharest 8650.2 8647.4 +0.03 +22.0
7 9 % 9%
Ljubljana 783.11 789.05 -0.75% +9.13
Zagreb 1862.7 1862.0 +0.04 -6.62%
9 7 %
Belgrade 717.62 717.82 -0.03% +0.03
Sofia 658.74 659.50 -0.12% +12.3
Yield Yield Spread Daily
(bid) change vs change
2-year -0.164 0.018 +053b +2bps
5-year -0.057 0.028 +034b +4bps
10-year 0.736 -0.023 +041b -2bps
2-year 1.924 0.003 +261b +1bps
5-year 2.71 0.007 +311b +2bps
10-year 3.292 0.002 +296b +1bps
FORWARD RATE AGREEMENT
3x6 6x9 9x12 3M
Czech Rep <PR 0.36 0.43 0.51 0
Hungary <BU 0.19 0.23 0.29 0.15
Poland <WI 1.753 1.774 1.812 1.73
Note: FRA are for ask
(Reporting by Sandor Peto; Editing by Hugh Lawson)