August 27, 2018 / 10:28 AM / 4 months ago

CEE MARKETS-Warsaw at 5-month highs leads stocks gains, currencies mixed

    * Warsaw leads stocks rise on Fed chair comments
    * Coal producer JSW shares rise more than 10 pct
    * Currencies are mixed, dollar and euro prospects are
uncertain
    * Romania increases government bond sale again

 (Adds Romania's government bond auction, extended JSW stocks
gains)
    By Sandor Peto
    BUDAPEST, Aug 27 (Reuters) - Polish stocks hit their
strongest levels since March on Monday, leading Central European
shares higher as they tracked a global rally after Friday's
comments from the Federal Reserve suggested no pick-up in the
pace or strength of U.S. interest rate hikes.
    Stocks rose globally after comments from Fed chair Jerome
Powell confirmed that rate hikes would remain gradual and
dependent on economic data.
    Poland's bluechip stock index hit its highest level
since March 13.
    At 1313 GMT, it was higher by 2.4 percent from Friday, with
the heavy-weight sub-index of banks rising 2 percent.
    The aggregated profit of Polish banks rose 17 percent
year-on-year in the first half of the year according to data
released on Friday.
    The shares of JSW, the European Union's biggest coal
producer, soared 10 percent to double earlier gains after JSW
said it wanted to pay out 25-30 percent of its 2017 net profit
in dividends. The stock was initially boosted by a
higher-than-expected quarterly net profit reported on Friday.

    Budapest's stock index rose almost 1 percent, driven
by a 1.75 percent gain by Hungary's largest lender, OTP Bank
 that crossed a psychological barrier of 10,000 forints
($35.47).
    But Central European currencies were mixed in cautious
trading, with the dollar treading water.
    The dollar's rally in the past few months has caused waves
of emerging market selling including the EU's eastern economies.
    Market players' net long bets on the dollar rose slightly
last week, reflecting expectations for a further firming.
    But uncertainty over U.S. President Donald Trump's future
cast a shadow on the currency, while Italy's political and
economic risks may weigh on the euro, Central Europe's reference
currency, one Budapest-based currency dealer said.      
    The Turkish lira's woes is an additional uncertainty factor,
the trader said.
    While the Czech crown and the zloty
firmed a shade, the forint eased slightly.
    The leu weakened by 0.2 percent, retreating after a rise in
the past three weeks.
    While Central European government bonds were mostly steady,
Romania's 2-year benchmark bond yield was bid higher
by 21 basis points at 3.9 percent and the bid for the 3-year
bond edged up by 5 basis points to 4 percent yield.
    Some investors were trying to push the yields higher from
2-month lows they reached last week. The mid-yield between bid
and ask, however, was little changed.
    The yields fell earlier this month due to expectations that
Romania's inflation could retreat rapidly in the second half of
2018 from June's 5.4 percent, the region's highest level.
    The government sold more than planned 2020-expiry bonds at
its second auction in a row that drew strong demand after a
strong tender last week.
    
            CEE       SNAPSHOT   AT                         
            MARKETS             1513 CET            
                      CURRENCI                              
                      ES                            
                      Latest    Previous  Daily     Change
                      bid       close     change    in 2018
 Czech      <EURCZK=   25.7200   25.7570    +0.14%    -0.69%
 crown      >                                       
 Hungary    <EURHUF=  323.8000  323.5900    -0.06%    -3.98%
 forint     >                                       
 Polish     <EURPLN=    4.2700    4.2745    +0.11%    -2.19%
 zloty      >                                       
 Romanian   <EURRON=    4.6421    4.6351    -0.15%    +0.81%
 leu        >                                       
 Croatian   <EURHRK=    7.4380    7.4386    +0.01%    -0.10%
 kuna       >                                       
 Serbian    <EURRSD=  118.1300  118.1000    -0.03%    +0.31%
 dinar      >                                       
 Note:      calculated from               1800 CET          
 daily                                              
 change                                             
                                                            
                      Latest    Previous  Daily     Change
                                close     change    in 2018
 Prague                1080.17  1072.860    +0.68%    +0.19%
                                       0            
 Budapest             36532.98  36192.13    +0.94%    -7.22%
 Warsaw                2367.53   2312.70    +2.37%    -3.81%
 Bucharest             8284.83   8271.66    +0.16%    +6.85%
 Ljubljana  <.SBITOP    866.53    865.27    +0.15%    +7.46%
            >                                       
 Zagreb                1819.21   1820.55    -0.07%    -1.28%
 Belgrade   <.BELEX1    734.37    730.52    +0.53%    -3.35%
            5>                                      
 Sofia                  633.77    636.32    -0.40%    -6.45%
                      BONDS                                 
                      Yield     Yield     Spread    Daily
                      (bid)     change    vs Bund   change
                                                    in
 Czech                                              spread
 Republic                                           
   2-year   <CZ2YT=R    1.2960   -0.0030   +190bps     -1bps
            R>                                      
   5-year   <CZ5YT=R    1.6950   -0.0120   +195bps     -3bps
            R>                                      
   10-year  <CZ10YT=    2.1080    0.0140   +174bps     -2bps
            RR>                                     
 Poland                                                     
   2-year   <PL2YT=R    1.6120    0.0040   +221bps     -1bps
            R>                                      
   5-year   <PL5YT=R    2.4990    0.0070   +275bps     -1bps
            R>                                      
   10-year  <PL10YT=    3.1880   -0.0050   +282bps     -3bps
            RR>                                     
            FORWARD   RATE      AGREEMEN                    
                                T                   
                      3x6       6x9       9x12      3M
                                                    interban
                                                    k
 Czech Rep                1.84      1.96      2.05      1.49
            <PRIBOR=                                
            >                                       
 Hungary                  0.43      0.64      0.84      0.18
                                                    
 Poland                   1.75      1.79      1.83      1.71
                                                    
 Note: FRA  are for ask prices                              
 quotes                                             
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 (Reporting by Sandor Peto, editing by Andrei Khalip)
  
 
 
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