October 18, 2019 / 9:45 AM / a month ago

CEE MARKETS-Currencies firm slightly as all eyes on Brexit vote

    By Alan Charlish and Anna Wlodarczak-Semczuk
    WARSAW, Oct 18 (Reuters) - Central Europe's main currencies
mostly firmed slightly on Friday, with a sentiment boost from a
newly-agreed Brexit deal offsetting worries about the global
economy as China posted weaker-than expected growth in the third
quarter.
    The twin sagas of Brexit and the trade war between the
United States and China have shaped risk sentiment in global
financial markets this year, with emerging market assets
particularly sensitive to developments.
    Markets got a boost on Thursday when EU leaders unanimously
backed the new Brexit deal, but British Prime Minister Boris
Johnson faces a battle to secure parliament's backing on
Saturday if he still hopes to take Britain out of the EU on Oct.
31.
    In China, third quarter gross domestic product rose just
6.0% year-on-year, as the trade war with the U.S. hit factory
production.
    At 0848 GMT the Polish zloty was flat against the
euro at 4.2825. The Czech crown was 0.14% stronger at
25.668 while the Hungarian forint firmed 0.12% to
330.69.
    "The market is waiting for the final Brexit news, tomorrow's
vote in parliament in London... It's a major, major risk event
tomorrow," said a Warsaw-based currency trader.
    "The zloty is quite strong... I think the scope to move
lower in euro/zloty is limited, we've reached the bottom of the
range."
    In Poland, September industrial output and PPI both beat
analysts' estimates, rising 5.6% and 0.9% year on year
respectively.
    "0.9% is not a level that would cause anxiety, the market
reaction seems neutral to me, because the situation on the
markets is determined by global factors," said Grzegorz
Maliszewski, Chief economist at Bank Millennium.
    Czech 10-year yields rose 2.8 basis points to
1.453%, while Polish 10-year paper traded at 2.025%,
up almost 1 basis point.
    Central European bonds often track western European peers,
and eurozone bond yields inched up ahead of Saturday's Brexit
vote.
    Stocks were mixed with Prague's PX index rising 0.64%
while Warsaw's WIG 20 fell 0.56%.
    Polish mining company JSW was the worst performer
on the WIG 20, falling 3.5% after it reported a drop in coal
sales in the third quarter despite an increase in production.
    
    
            CEE        SNAPSHOT   AT                         
            MARKETS              1048 CET            
                       CURRENCI                              
                       ES                            
                       Latest    Previous  Daily     Change
                       bid       close     change    in 2019
 Czech                  25.6700   25.6730    +0.01%    +0.14%
 crown                                               
 Hungary               330.6900  331.1000    +0.12%    -2.90%
 forint                                              
 Polish                  4.2825    4.2824    -0.00%    +0.17%
 zloty                                               
 Romanian                4.7550    4.7538    -0.03%    -2.12%
 leu                                                 
 Croatian                7.4405    7.4423    +0.02%    -0.41%
 kuna                                                
 Serbian               117.5000  117.6100    +0.09%    +0.68%
 dinar                                               
 Note:      calculated from                1800 CET          
 daily                                               
 change                                              
                                                             
                       Latest    Previous  Daily     Change
                                 close     change    in 2019
 Prague                 1040.87  1034.300    +0.64%    +5.50%
                                        0            
 Budapest              40627.51  40717.17    -0.22%    +3.80%
 Warsaw                 2161.52   2173.75    -0.56%    -5.06%
 Bucharest              9585.69   9558.18    +0.29%   +29.82%
 Ljubljana               873.25    871.28    +0.23%    +8.58%
 Zagreb                 2016.63   2011.29    +0.27%   +15.31%
 Belgrade   <.BELEX15    744.53    747.83    -0.44%    -2.25%
            >                                        
 Sofia                   565.41    563.67    +0.31%    -4.89%
                       BONDS                                 
                       Yield     Yield     Spread    Daily
                       (bid)     change    vs Bund   change
                                                     in
 Czech                                               spread
 Republic                                            
   2-year   <CZ2YT=RR    1.3980    0.0680   +205bps     +6bps
            >                                        
   5-year   <CZ5YT=RR    1.1060   -0.0470   +174bps     -6bps
            >                                        
   10-year  <CZ10YT=R    1.4530    0.0280   +184bps     +1bps
            R>                                       
 Poland                                                      
   2-year   <PL2YT=RR    1.5010   -0.0090   +215bps     -1bps
            >                                        
   5-year   <PL5YT=RR    1.7870    0.0130   +242bps     +0bps
            >                                        
   10-year  <PL10YT=R    2.0250    0.0090   +241bps     -1bps
            R>                                       
            FORWARD    RATE      AGREEMEN                    
                                 T                   
                       3x6       6x9       9x12      3M
                                                     interban
                                                     k
 Czech Rep          <      2.31      2.32      2.25      2.18
            PRIBOR=>                                 
 Hungary            <      0.27      0.31      0.31      0.21
            BUBOR=>                                  
 Poland             <      1.73      1.70      1.68      1.71
            WIBOR=>                                  
 Note: FRA  are for ask prices                               
 quotes                                              
 **************************************************          
 ************                                        
 
    

 (Reporting by Alan Charlish and Anna Wlodarczak-Semczuk in
Warsaw, Radu-Sorin Marinas in Bucharest and Krisztina Than in
Budapest; Editing by Toby Chopra)
  
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