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CEE MARKETS-Stocks, currencies rise on U.S. data; Serbia holds rates
July 10, 2017 / 1:56 PM / 4 months ago

CEE MARKETS-Stocks, currencies rise on U.S. data; Serbia holds rates

    * Fx, stocks firm as U.S. data fuels risk appetite
    * Serbian central bank keeps rates on hold, sells dinar in
market
    * Czech crown near strongest levels since 2013
    * Czech central bank data shows fx reserves rose in June

 (Adds Serbian central bank decision, dinar selling)
    By Sandor Peto
    BUDAPEST, July 10 (Reuters) - Central European stocks rose
and most of the region's currencies firmed slightly on Monday,
benefiting from rising risk appetite in the wake of strong U.S.
jobs data late last week.
    Bucharest led equity gains, with its main index
rising by 0.9 percent by 1317 GMT.
    The dinar was steady after Serbia kept its main
interest rate, the highest in the region, at 4 percent as
expected.
    After announcing its decision, the central bank sold dinar
 in the market, dealers said, to prevent a firming
through the 120 psychological level against the euro which it
has been testing since Friday when it hit 20-month highs. 
    The dinar was trading at 120.08 at 1317 GMT, staying near
the high despite the intervention by the bank, which has
purchased around 530 million euros ($604 million) so far this
year.
    An interest rate cut could weaken the dinar, but the bank
fears a cut could hit appetite for dinar-denominated securities
in a period when monetary policy tightening by the world's main
central banks is a key risk.
    The dinar could come under pressure soon from uncertainty
over the future of Serbia's deal with the IMF, which will expire
next year, and possible delays in the restructuring of
state-owned firms, Raiffeisen analyst Wolfgang Ernst said in a
note. 
    In a Reuters poll last week analysts saw the dinar
retreating to 124 per euro in the next 12 months.
    The Czech crown traded at 26.102 against the euro, still
near Friday's 26.048 peak, its strongest level since late 2013.
    It was buoyed on Friday by data showing robust growth in
industrial output and retail sales in May, reflecting the
region's solid economic growth.
   The crown has been strengthening since early April when the 
Czech central bank removed a cap which had kept it weaker than
27 for years.
    Before the exit, the bank sold crowns worth tens of billions
of euros in the market to defend the cap, boosting its foreign
currency reserves.
    Czech end-June reserve figures released on Monday showed a
further rise last month, to 124.89 billion euros from a revised
124.01 billion euros in May, while the central bank said it did
not sell or buy any foreign currency in the spot market in May.

    Hungarian and Polish long-term government bond yields
dropped by a few basis points after a sharp rise in the past two
weeks due to hawkish comments from European Central Bank
officials.
    
                CEE MARKETS  SNAPSH   AT  1517 CET         
                             OT                      
                             CURRENCIES                    
                             Latest  Previo  Daily   Change
                                     us              
                             bid     close   change  in
                                                     2017
 Czech crown                 26.102  26.088  -0.05%   3.47%
                                  0       0          
 Hungary                     308.00  308.03   +0.01   0.27%
 forint                          00      00       %  
 Polish zloty                4.2351  4.2356   +0.01   3.99%
                                                  %  
 Romanian leu                4.5690  4.5767   +0.17  -0.74%
                                                  %  
 Croatian kuna               7.4035  7.4115   +0.11   2.05%
                                                  %  
 Serbian dinar               120.08  120.11   +0.02   2.72%
                                 00      00       %  
 Note: daily    calculated   previo  close   1800          
 change         from         us      at      CET     
                             STOCKS                        
                             Latest  Previo  Daily   Change
                                     us              
                                     close   change  in
                                                     2017
 Prague                      995.81  992.18   +0.37   +8.05
                                                  %       %
 Budapest                    35681.  35503.   +0.50   +11.4
                                 43      69       %      9%
 Warsaw                      2290.8  2295.8  -0.22%   +17.6
                                  8       2              1%
 Bucharest                   8118.0  8044.7   +0.91   +14.5
                                  1       9       %      8%
 Ljubljana                   804.90  801.45   +0.43   +12.1
                                                  %      7%
 Zagreb                      1861.3  1871.9  -0.57%  -6.69%
                                  5       7          
 Belgrade                    716.42  709.77   +0.94  -0.13%
                                                  %  
 Sofia                       704.58  707.96  -0.48%   +20.1
                                                         5%
                             BONDS                         
                             Yield   Yield   Spread  Daily
                             (bid)   change  vs      change
                                             Bund    in
 Czech                                               spread
 Republic                                            
   2-year                     0.119    0.12   +072b   +13bp
                                                 ps       s
   5-year                     0.164   0.063   +027b   +8bps
                                                 ps  
   10-year                    1.064  -0.029   +052b   +0bps
                                                 ps  
 Poland                                                    
   2-year                      1.83  -0.195   +244b  -19bps
                                                 ps  
   5-year                     2.677   -0.05   +278b   -3bps
                                                 ps  
   10-year                    3.307  -0.054   +277b   -2bps
                                                 ps  
                FORWARD      RATE    AGREEMENT             
                             3x6     6x9     9x12    3M
                                                     interb
                                                     ank
 Czech Rep              <PR    0.45    0.53    0.63       0
                IBOR=>                               
 Hungary                <BU    0.21    0.25     0.3    0.15
                BOR=>                                
 Poland                 <WI   1.752    1.79    1.84    1.73
                BOR=>                                
 Note: FRA      are for ask                                
 quotes         prices                               
 **********************************************************
 ****
 

($1 = 0.8780 euros)

 (Additional reporting by Radu Marinas in Bucharest; Editing by
Keith Weir and Susan Fenton)
  
 
 

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