March 15, 2019 / 11:11 AM / 2 months ago

CEE MARKETS-Romania's leu buoyed by expectations of benign S&P report

    * S&P to publish good report for Romania- minister 
    * Government pledges to soften its tax plans
    * President signs budget bill into law

    By Radu-Sorin Marinas
    BUCHAREST, March 15 (Reuters) - Romania's leu
extended its gains against the euro on Friday after rebounding
from six-week lows in the previous session, supported by
expectations of a benign report from Standard & Poor's on the
country's credit rating outlook.
    The rating agency is expected to announce its decision late
on Friday or on Saturday.
    "We're going to hear a very good (S&P) decision," Finance
Minister Eugen Teodorovici told a private television channel.
    Romanian asset prices have been jittery since the leftist
government announced three months ago a raft of new taxes on
energy companies and banks to finance higher state spending.
    The tax on bank assets has complicated monetary policy
because it is linked to interbank rates. The government promised
to amend the tax after S&P gave Romania two weeks from March 2
to appeal its credit rating outlook.
    The rating agency did not publish that rating outlook but it
was widely understood in financial markets to be negative,
revised down from stable.
    "The 4.7500-4.7700 (leu) range should hold for today,
awaiting the S&P review tonight. This comes after a two
week delay due to the Romanian government's appeal against its
revision of the outlook to negative from stable," ING Bank
analysts in Bucharest said in a note.
    By 1100 GMT, the leu had firmed 0.2 percent
against the euro to trade at 4.7560.
    Earlier on Friday President Klaus Iohannis, a critic of the
ruling Social Democrats' budget which he and many economic
analysts had branded as unrealistic, signed the bill into law
after he had exhausted all legal ways to halt it.

    The Polish zloty and the Czech crown
both traded virtually flat to the euro on Friday, at 4.3050 and
25.671 respectively.
    Hungarian markets were closed for a national Holiday.
        

            CEE        SNAPSHOT     AT  1110                  
            MARKETS                CET              
                       CURRENCIES                             
                       Latest      Previous   Dail  Change
                                              y     
                       bid         close      chan  in 2019
                                              ge    
 Czech                    25.6660    25.6610  -0.0      +0.16%
 crown                                          2%  
 Hungary                 314.3500   314.3100  -0.0      +2.14%
 forint                                         1%  
 Polish                    4.3039     4.3025  -0.0      -0.33%
 zloty                                          3%  
 Romanian                  4.7574     4.7650   +0.      -2.17%
 leu                                           16%  
 Croatian                  7.4180     7.4215   +0.      -0.11%
 kuna                                          05%  
 Serbian                 118.0800   118.1100   +0.      +0.19%
 dinar                                         03%  
 Note:      calculated from                   1800            
 daily                                        CET   
 change                                             
                                                              
                       Latest      Previous   Dail  Change
                                              y     
                                   close      chan  in 2019
                                              ge    
 Prague                   1073.75  1068.4300   +0.      +8.84%
                                               50%  
 Budapest                41335.02   41335.02   +0.      +5.61%
                                               00%  
 Warsaw                   2325.69    2319.28   +0.      +2.15%
                                               28%  
 Bucharest                7889.24    7858.18   +0.      +6.85%
                                               40%  
 Ljubljana                 874.01     869.00   +0.      +8.67%
                                               58%  
 Zagreb                   1766.93    1770.01  -0.1      +1.04%
                                                7%  
 Belgrade   <.BELEX15      707.47     707.10   +0.      -7.12%
            >                                  05%  
 Sofia                     580.79     579.50   +0.      -2.30%
                                               22%  
                       BONDS                                  
                       Yield       Yield      Spre  Daily
                                              ad    
                       (bid)       change     vs    change in
                                              Bund  
 Czech                                              spread
 Republic                                           
   2-year   <CZ2YT=RR      1.8110     0.0190   +23       +2bps
            >                                 6bps  
   5-year   <CZ5YT=RR      1.7730    -0.0130   +21       -1bps
            >                                 5bps  
   10-year  <CZ10YT=R      1.9190     0.0150   +18       +2bps
            R>                                4bps  
 Poland                                                       
   2-year   <PL2YT=RR      1.6260    -0.1090   +21      -10bps
            >                                 7bps  
   5-year   <PL5YT=RR      2.2410     0.0010   +26       +1bps
            >                                 2bps  
   10-year  <PL10YT=R      2.8990     0.0100   +28       +2bps
            R>                                2bps  
            FORWARD    RATE        AGREEMENT                  
                       3x6         6x9        9x12  3M
                                                    interbank
 Czech Rep          <        2.19       2.23  2.24        2.03
            PRIBOR=>                                
 Hungary            <        0.41       0.60  0.80        0.14
            BUBOR=>                                 
 Poland             <        1.74       1.73  1.74        1.72
            WIBOR=>                                 
 Note: FRA  are for ask prices                                
 quotes                                             
 *************************************************            
 *************                                      
 
($1 = 278.1600 forints)

 (Editing by Gareth Jones)
  
 
 
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