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CEE MARKETS-Kuna slides on Agrokor; Poland, Romania keep rates on hold
April 5, 2017 / 9:42 AM / 8 months ago

CEE MARKETS-Kuna slides on Agrokor; Poland, Romania keep rates on hold

    * Kuna hits eight-week low as worry over Agrokor group
mounts
    * Polish, Romanian central banks keep rates on hold as
expected
    * Romanian central bank chief sees inflation well below
target
    * Czech retail data show slowdown, Hungarian industry
picking up

 (Recasts with Polish and Romanian central bank decisions,
comments)
    By Sandor Peto and Anna Koper
    BUDAPEST/WARSAW, April 5 (Reuters) - The kuna fell on
Wednesday due to uncertainty over the debt of Croatia's biggest
private firm, Agrokor          , while other Central European
currencies firmed after the Polish and Romanian central bank
kept interest rates on hold.
    The kuna touched 8-week lows against the euro and,
trading at 7.45 per euro at 1248 GMT, it eased 0.2 percent.
Zagreb stocks fell 2.1 percent, bucking a rise in the
region's main equities indices.
    Croatia's parliament could pass an emergency law as early as
Wednesday to shield the economy from big company failures after
food and retail company Agrokor piled up debts, leaving it
struggling to pay creditors and suppliers.
    Shares in Agrokor unit Ledo, which makes
ice-cream, fell 13 percent to 8-year lows, and have shed 30
percent since Monday.  
    Elsewhere, the zloty, firmed 0.4 percent and the
leu gained 0.1 percent.
    Decisions by the Polish and Romanian central banks to keep
interest rates on hold had been expected. The Polish central
bank was to hold a news conference later on Wednesday.
    Investors scaled back expectations for a shift to more
hawkish rhetoric by the Polish central bank after flash figures
for March, published on Friday, showed a lower than expected 2
percent annual inflation rate.
    "I don't think that the zloty's strengthening results from
the fundamentals. I would rather assign it to technical
reasons," said Mateusz Sutowicz, analyst at the Warsaw-based
Bank Millennium. 
    The direction of inflation trends in Poland often heralds
changes across the region.
    Wednesday's February Czech retail figures showed a slowdown
in annual sales growth to 0.6 percent.
    PMI manufacturing indexes released in the region on Monday
were below forecasts, but still showed steady growth.
    Hungary's retail sales have also slowed.
    According to Wednesday's figures, Hungary's unadjusted
February industrial output slowed to 2.7 percent from 6.5
percent in January, but the change was caused by one less
working day than a year ago and the underlying trend is still
upwards, analysts said.
    The forint eased slightly but stayed near the
psychological important barrier of 310 against the euro, around
which it has been hovering for months.
    The leu gained a quarter of a percent, trading at
4.531 versus the euro, after the Romanian central bank kept
rates on hold and its governor Mugur Isarescu said inflation
will be significantly below the lower side of the target range
over the next few months.
    
              CEE        SNAPS   AT  1448          
              MARKETS    HOT    CET           
                         CURRENCIES                
                         Lates  Previ  Daily  Chang
                         t      ous           e
                         bid    close  chang  in
                                       e      2017
 Czech crown             27.05  27.04  -0.05  -0.18
                            60     25      %      %
 Hungary                 310.1  309.7  -0.14  -0.43
 forint                    500    300      %      %
 Polish                  4.233  4.249   +0.3  4.02%
 zloty                       8      9     8%  
 Romanian                4.538  4.542   +0.0  -0.07
 leu                         3      1     8%      %
 Croatian                7.450  7.437  -0.17  1.41%
 kuna                        0      5      %  
 Serbian                 123.7  123.9   +0.1  -0.28
 dinar                     000    250     8%      %
 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                  984.9  981.0   +0.4   +6.8
                             2      3     0%     7%
 Budapest                32327  31951   +1.1   +1.0
                           .25    .94     7%     1%
 Warsaw                  2249.  2239.   +0.4   +15.
                            22     30     4%    47%
 Bucharest               8187.  8167.   +0.2   +15.
                            86     94     4%    57%
 Ljubljana               779.2  786.2  -0.88   +8.6
                             9      4      %     0%
 Zagreb                  1940.  1981.  -2.07  -2.71
                            75     69      %      %
 Belgrade     <.BELEX15  729.4  729.5  -0.01   +1.6
              >              7      4      %     9%
 Sofia                   642.8  636.0   +1.0   +9.6
                             6      3     7%     2%
                         BONDS                     
                         Yield  Yield  Sprea  Daily
                                       d      
                         (bid)  chang  vs     chang
                                e      Bund   e in
 Czech                                        sprea
 Republic                                     d
   2-year     <CZ2YT=RR  -0.26  0.017   +052   +1bp
              >              2           bps      s
   5-year     <CZ5YT=RR  0.069  0.008   +051   +0bp
              >                          bps      s
   10-year    <CZ10YT=R  0.918  -0.10   +065  -12bp
              R>                    9    bps      s
 Poland                                            
   2-year     <PL2YT=RR  2.027  0.049   +280   +4bp
              >                          bps      s
   5-year     <PL5YT=RR  2.907  0.036   +335   +3bp
              >                          bps      s
   10-year    <PL10YT=R   3.47  0.032   +321   +2bp
              R>                         bps      s
              FORWARD    RATE   AGREEMENT          
                         3x6    6x9    9x12   3M
                                              inter
                                              bank
 Czech Rep            <   0.28   0.32   0.37      0
              PRIBOR=>                        
 Hungary              <   0.22   0.29   0.38   0.18
              BUBOR=>                         
 Poland               <   1.75  1.771  1.799   1.73
              WIBOR=>                         
 Note: FRA    are for                              
 quotes       ask                             
              prices                          
 **************************************************
 ************
   

 (Additional reporting by Radu Marinas in Bucharest, Jason Hovet
in Prague and Igir Ilic in Zagreb; Editing by Jon Boyle)
  
 
 

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