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CEE MARKETS-Bond yields rise before U.S. jobs data released
October 6, 2017 / 11:17 AM / 2 months ago

CEE MARKETS-Bond yields rise before U.S. jobs data released

    * Polish 10-year bond yield trades at five-month high
    * Upcoming U.S. jobs report weighs on CEE bond prices,
currencies
    * Romanian liquidity squeeze may remain, central bank
watched
    * Czech bonds buck easing, analyst poll sees further crown
gains

    By Sandor Peto and Luiza Ilie
    BUDAPEST/BUCHAREST, Oct 6 (Reuters) - Central European debt
yields rose on Friday before a U.S. jobs report that might
increase the chances the Federal Reserve will raise interest
rates later this year.
    Regional currencies mostly eased because a good jobs report
would strengthen the U.S. dollar.
    Romania's government on Thursday rejected all bids at a bond
tender for the first time since March, unwilling to tolerate a
yield rise amid low demand.
    Romanian bonds mostly tracked a global rise in yields on
Friday, with the yield on 2018 and 2019 expiries rising 5 to 7
basis points to 1.64 and 1.89 percent, respectively, one trader
said.    
    Poland's 10-year yield reached a five-month high, rising 6
basis points to 3.439 percent. Hungary's yield rose 5 basis
points to 2.71 percent.
    Romania's three-month interbank rate was set at
1.78 percent, remaining near three-year highs, even though the
central bank injected 9.4 billion lei into the market through a
repo tender on Tuesday.
    The usual wage and other payments around Oct. 10 may not
ease the liquidity shortage because dividend payments by
state-owned companies and improved tax collection have pumped
lei out of markets. 
    A seasonal jump in government spending late in the year may
increase liquidity, but may also weigh on the leu,
which traded a touch off seven-week highs against the euro.
    Concern over a rise in the deficit may prompt Standard &
Poor's to revise the outlook for its rating for Romania to
negative in a review late on Friday, Raiffeisen said in a note.
    Elsewhere, Czech bonds were mostly steady.
    Foreigners holding long positions in the Czech crown
 have not rushed to take profit, even though the
currency has gained 4.5 percent so far this year, fuelled by
expectations for rate hikes by the central bank.
    The crown traded slightly weaker at 25.84 against the euro
but still near its strongest levels since the CNB removed a cap
on its value in April, which had kept it weaker than 27 to the
euro for years.
    A Reuters poll of analysts on Friday forecast that the crown
would gain a further 1.3 percent in the next 12 months.
    
               CEE MARKETS  SNAPSH   AT  1127 CET         
                            OT                      
                            CURRENCIES                    
                            Latest  Previo  Daily   Change
                                    us              
                            bid     close   change  in
                                                    2017
 Czech crown                25.840  25.833  -0.03%   4.52%
                                 0       5          
 Hungary                    311.78  311.94   +0.05  -0.95%
 forint                         00      00       %  
 Polish zloty               4.3048  4.3023  -0.06%   2.30%
 Romanian leu               4.5760  4.5742  -0.04%  -0.90%
 Croatian                   7.5040  7.5060   +0.03   0.68%
 kuna                                            %  
 Serbian                    119.08  119.09   +0.01   3.59%
 dinar                          00      00       %  
 Note: daily   calculated   previo  close   1800          
 change        from         us      at      CET     
                            STOCKS                        
                            Latest  Previo  Daily   Change
                                    us              
                                    close   change  in
                                                    2017
 Prague                     1059.5  1057.3   +0.21   +14.9
                                 9       9       %      7%
 Budapest                   37993.  37876.   +0.31   +18.7
                                37      47       %      2%
 Warsaw                     2484.1  2463.4   +0.84   +27.5
                                 4       5       %      3%
 Bucharest                  7953.1  7904.6   +0.61   +12.2
                                 0       2       %      5%
 Ljubljana                  800.44  801.09  -0.08%   +11.5
                                                        5%
 Zagreb                     1810.9  1800.9   +0.55  -9.22%
                                 6       8       %  
 Belgrade                   722.51  722.11   +0.06   +0.72
                                                 %       %
 Sofia                      677.06  672.93   +0.61   +15.4
                                                 %      5%
                            BONDS                         
                            Yield   Yield   Spread  Daily
                            (bid)   change  vs      change
                                            Bund    in
 Czech                                              spread
 Republic                                           
   2-year                    0.335       0   +102b   -1bps
                                                ps  
   5-year                    0.447   0.056   +069b   +4bps
                                                ps  
   10-year                   1.336  -0.006   +086b   -3bps
                                                ps  
 Poland                                                   
   2-year                    1.727   0.012   +241b   +0bps
                                                ps  
   5-year                     2.74   0.028   +299b   +1bps
                                                ps  
   10-year                   3.447   0.036   +297b   +1bps
                                                ps  
               FORWARD      RATE    AGREEMENT             
                            3x6     6x9     9x12    3M
                                                    interb
                                                    ank
 Czech Rep             <PR    0.76    0.91    1.05       0
               IBOR=>                               
 Hungary               <BU   0.085   0.115    0.17    0.03
               BOR=>                                
 Poland                <WI   1.771   1.818    1.91    1.73
               BOR=>                                
 Note: FRA     are for ask                                
 quotes        prices                               
 *********************************************************
 *****
 
 (Reporting by Sandor Peto, editing by Larry King)
  
 
 

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