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CEE MARKETS-Forint eases on changes in central bank, Fed expectations
March 6, 2017 / 10:30 AM / 9 months ago

CEE MARKETS-Forint eases on changes in central bank, Fed expectations

    * Zloty, forint ease, near psychological lines
    * Hungarian central banker responsibility cuts cause worry
    * Poland's biggest lender PKO earnings jump less than
expected

    By Sandor Peto
    BUDAPEST, March 6 (Reuters) - Hungary's forint eased on
Monday after the central bank further reduced the
responsibilities of Deputy Governor Marton Nagy, and Poland's
zloty again retreated behind a psychological line at 4.3 against
the euro.
    Regional equities were also mostly in the negative even
though the markets looked much calmer than a week when
profit-taking knocked down regional indices after a global
rally.
    The Hungarian central bank said Nagy would no longer be in
charge of financial stability issues, even though he will keep
monetary policy issues.
    Nagy, who is regarded as the mastermind of the bank's dovish
course built on unorthodox, liquidity-boosting tools and a
funding for growth scheme, resigned his post as chairman of the
Budapest Stock Exchange last week.
    The forint eased in tandem with the zloty against
the euro, shedding 0.3 percent by 0925 GMT to 309.81, testing
the 310 psychological line. 
    "It is an international impact, with the dollar easing
against the euro... and the news on Nagy may have also played a
role as he is liked in markets," one Budapest-based currency
dealer said.
    A fixed income trader at another bank said they were getting
inquiries from abroad about Nagy and the uncertainty over him
weighed on the forint, a development which is probably not
unwelcome by the central bank.
    "Monetary policy without Nagy would be probably even more
dovish than now," the trader said, adding that Hungarian
government bond yields dropped by a few basis points in the
morning, with the benchmark 10-year paper trading at 3.42
percent.
    Economic figures to be released in the region this week,
including Hungary, are likely to underpin consumption-led growth
and further rise in inflation, Erste group said in a note.
    "In general, we do not think that they will rush to increase
rates this year," it added.
    Central bank policy tightening later could lift the revenues
of commercial banks, further improving the sector's outlook
after a rise in earnings last year.
    Bank stocks have been a key driver of a rally if equities in
the region this year.
    The stocks of Poland's biggest lender, PKO BP eased
a shade after the bank reported 34 percent annual rise in its
fourth-quarter profits, less than expected.
    Warsaw's bluechip stock index dropped 0.2 percent,
mainly due to a 0.9 percent fall in the shares of copper
producer KGHM after a drop in copper prices.
    The stocks of Romanian Fondul Proprietatea fell 4.5
percent, trading ex-dividend.
    
              CEE        SNAPS   AT  1025          
              MARKETS    HOT    CET           
                         CURRENCIES                
                         Lates  Previ  Daily  Chang
                         t      ous           e
                         bid    close  chang  in
                                       e      2017
 Czech crown             27.02  27.02  -0.01  -0.06
                            20     00      %      %
 Hungary                 309.8  309.0  -0.26  -0.32
 forint                    100    000      %      %
 Polish                  4.308  4.295  -0.29  2.23%
 zloty                       0      6      %  
 Romanian                4.532  4.533   +0.0  0.06%
 leu                         5      2     2%  
 Croatian                7.414  7.416   +0.0  1.90%
 kuna                        5      6     3%  
 Serbian                 123.5  123.6   +0.1  -0.16
 dinar                     500    900     1%      %
 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                  974.5  974.2   +0.0   +5.7
                             5      3     3%     4%
 Budapest                33020  33193  -0.52   +3.1
                           .86    .81      %     8%
 Warsaw                  2228.  2232.  -0.20   +14.
                            55     98      %    41%
 Bucharest               7925.  7978.  -0.67   +11.
                            82     97      %    87%
 Ljubljana               784.8  793.8  -1.14   +9.3
                             1      3      %     7%
 Zagreb                  2211.  2218.  -0.30   +10.
                            67     38      %    87%
 Belgrade     <.BELEX15  714.8  722.1  -1.01  -0.35
              >              7      9      %      %
 Sofia                   618.0  613.0   +0.8   +5.3
                             2      7     1%     9%
                         BONDS                     
                         Yield  Yield  Sprea  Daily
                                       d      
                         (bid)  chang  vs     chang
                                e      Bund   e in
 Czech                                        sprea
 Republic                                     d
   2-year     <CZ2YT=RR  -0.58  0.074   +023   +8bp
              >              7           bps      s
   5-year     <CZ5YT=RR  -0.01  -0.03   +042  -2bps
              >              5      7    bps  
   10-year    <CZ10YT=R  0.672  -0.01   +034   +1bp
              R>                    6    bps      s
 Poland                                            
   2-year     <PL2YT=RR  2.173  0.003   +299   +1bp
              >                          bps      s
   5-year     <PL5YT=RR  3.038  -0.02   +347  -1bps
              >                     2    bps  
   10-year    <PL10YT=R  3.718  -0.01   +339   +2bp
              R>                    2    bps      s
              FORWARD    RATE   AGREEMENT          
                         3x6    6x9    9x12   3M
                                              inter
                                              bank
 Czech Rep            <   0.28   0.32   0.39      0
              PRIBOR=>                        
 Hungary              <   0.37   0.49   0.65   0.23
              BUBOR=>                         
 Poland               <   1.77    1.8   1.87   1.73
              WIBOR=>                         
 Note: FRA    are for                              
 quotes       ask                             
              prices                          
 **************************************************
 ************
 
 (Additional reporting by Radu Marinas in Bucharest and Marcin
Goclowski in Warsaw)
  
 
 

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