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Bonds News

CEE MARKETS-CEE shares gain, forint firms ahead of ECB meeting

    BUCHAREST, Sept 7 (Reuters) - Emerging European stocks
tracked broader markets higher on Monday as sentiment recovered
after a batch of middling economic data last week lifted hopes
that the European Central Bank would maintain an accommodative
stance to support inflation. 
    Traders also took stock of the latest U.S. jobs data and
prepared for the ECB meeting on Thursday to see if policymakers
will introduce yet more stimulus. 
    By 0905 GMT, Prague's bluechip index rose 0.9% on the
day, Bucharest gained 0.7%, Warsaw climbed 0.6%
and Budapest edged up 0.3%.
    In Prague, shares of artificial textile maker PFNonwovens
 rose more than 10% after the company said its majority
shareholder would launch a process for the mandatory buyout of
minority shareholders.
    Emerging European currencies were searching for a direction
after a rally in the U.S. dollar overshadowed the region last
week.
    The U.S. Labour Department report showed that U.S.
employment growth slowed and permanent job losses increased as
government funding started running out. Still, the jobless rate
fell to 8.4% from 10.2% in July. 
    Investors are not expecting any policy changes at Thursday's
ECB meeting, but will be listening closely for anything said
about the euro after a blistering rally that has likely unnerved
some policymakers.
    Data showed German industrial output rose far less than
expected in July, suggesting Europe's largest economy faces a
slow return to production levels that preceded the crisis
unleashed by the coronavirus crisis.
    The Hungarian forint was 0.2% stronger on the day,
trading at 360.2400 per euro, but hovering near the five-month
lows it touched last week. The currency is at its weakest since
climbing back from a record low set in April, during the first
wave of the pandemic.
    "The forint has been underperforming its regional peers in
the past month, and this underperformance is also significant if
we look at the entire year," CIB Bank said in a note.
    "This suggest that there are country-specific factors behind
the currency's movements as well," the note said, mentioning
high inflation, weak second-quarter GDP data, the central bank’s
commitment to relatively low interest rates and a jump in the
budget deficit.
    Hungary's recovery from the coronavirus crisis will likely
be slower than previously expected, two central bank sources
told Reuters, adding that the bank was nearing its limits with
tools to stimulate the economy.
    The Romanian leu was flat against the euro at
4.8545, but near its lowest level since March.
    Analysts said a failed no-confidence vote against the
centrist minority government last week and setting Dec. 6 as the
date for a parliamentary election had dispelled some political
uncertainties and were driving debt yields lower.
    Romanian debt managers tender 500 million lei ($121.91
million) worth of Nov. 2024 treasury bonds on Monday. 
    Elsewhere in the region, the Polish zloty was up
0.3% against the euro, while the Czech crown was 0.1%
weaker at 26.51. 

           CEE      SNAPSHO   AT                      
           MARKETS  T        1117              
                             CET               
                    CURRENC                           
                    IES                        
                    Latest   Previou  Daily    Change
                             s                 
                    bid      close    change   in 2020
 Czech     <EURCZK  26.5100  26.4800   -0.11%   -4.07%
 crown     =>                                  
 Hungary   <EURHUF  360.150  360.790   +0.18%   -8.05%
 forint    =>             0        0           
 Polish    <EURPLN   4.4575   4.4682   +0.24%   -4.51%
 zloty     =>                                  
 Romanian  <EURRON   4.8550   4.8540   -0.02%   -1.37%
 leu       =>                                  
 Croatian  <EURHRK   7.5390   7.5385   -0.01%   -1.24%
 kuna      =>                                  
 Serbian   <EURRSD  117.500  117.540   +0.03%   +0.06%
 dinar     =>             0        0           
 Note:     calculated from            1800            
 daily                                CET      
 change Latest   Previou  Daily    Change
                             s                 
                             close    change   in 2020
 Prague              911.25  902.620   +0.96%  -18.32%
                                   0           
 Budapest           34978.9  34836.8   +0.41%  -24.10%
                          8        2           
 Warsaw    <.WIG20  1771.17  1758.11   +0.74%  -17.62%
           >                                   
 Buchares           9043.56  8993.80   +0.55%   -9.36%
 t                                             
 Ljubljan  <.SBITO   852.71   838.08   +1.75%   -7.90%
 a         P>                                  
 Zagreb    <.CRBEX  1602.14  1608.77   -0.41%  -20.59%
           >                                   
 Belgrade  <.BELEX   688.27   695.36   -1.02%  -14.15%
           15>                                 
 Sofia     <.SOFIX   435.11   435.11   +0.00%  -23.42%
           > Yield    Yield    Spread   Daily
                    (bid)    change   vs Bund  change
                                               in
 Czech                                         spread
 Republic                                      
   2-year  <CZ2YT=   0.1960   0.0220   +089bp    +1bps
           RR>                              s  
   5-year  <CZ5YT=   0.6880  -0.0420   +138bp    -5bps
           RR>                              s  
           <CZ10YT   1.1090  -0.0190   +158bp    -3bps
 10-year   =RR>                             s  
 Poland                                               
   2-year  <PL2YT=   0.1170  -0.0320   +081bp    -4bps
           RR>                              s  
   5-year  <PL5YT=   0.7360  -0.0030   +143bp    -1bps
           RR>                              s  
           <PL10YT   1.4170   0.0100   +188bp    +0bps
 10-year   =RR>                             s  
           FORWARD                                    
                    3x6      6x9      9x12     3M
                                               interba
                                               nk
 Czech     <CZKFRA     0.37     0.38     0.45     0.34
 Rep       ><PRIBO                             
           R=>                                 
 Hungary   <HUFFRA     0.78     0.85     0.90     0.62
           ><BUBOR                             
           =>                                  
 Poland    <PLNFRA     0.21     0.20     0.21     0.23
           ><WIBOR                             
           =>                                  
 Note:     are for ask                                
 FRA       prices                              
 quotes                                        
 ********************************************         
 ******************                            
 
 (Reporting by Luiza Ilie in Bucharest, Anita Komuves in
Budapest and Jason Hovet in Prague; Editing by Sherry
Jacob-Phillips)
  
 
 
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