January 7, 2019 / 10:47 AM / 6 months ago

CORRECTED-CEE MARKETS-Stocks rise, forint and crown trade near multi-month highs

 (Corrects lead to read "risk appetite" not "risk aversion")
    * Warsaw leads rise in stocks, U.S. jobs data boosts risk
appetite
    * Zloty hovers to 90-day moving average, crown and forint
off high
    * Romanian central banker warns over policy independence
    * Polish 10-year yield drops again after Friday's rebound

    By Sandor Peto and Radu-Sorin Marinas
    BUDAPEST/BUCHAREST, Jan 7 (Reuters) - Central European
stocks mostly firmed on Monday as strong U.S. jobs data released
on Friday increased risk appetite in global markets while the
region's currency markets remained cautious.
    Although Warsaw led the region's mild equity gains, with its
blue-chip index rising by 0.8 percent by 0947 GMT, the
zloty led losses, shedding a quarter of a percent.
    Trading at 4.2985 versus the euro, it was still not weaker
than its 90-day moving average.
    The Czech crown touched a 3-1/2-month high before retreating
to 25.566 versus the euro, flat from Friday, while the forint
 retreated from the brink of 5-month highs beyond
320.8, and traded at 321.17.
    Data released by Hungary on Monday showed a slight slowdown
in the annual growth of retail sales to 5.2 percent in November.

    But wages continue to surge as the region's labour markets
are tight, probably boosting imports and nudging short-term
interbank interest rates higher this year, analysts said.
    Czech interest rates should continue to rise until there is
a clear view of a recession risk or signs that inflation is
tamed, hawkish central bank (CNB) board member Ales Michl said
in daily Mlada Fronta Dnes on Monday.
    Even before the CNB's February meeting, Romania and Poland's
central banks will decide on interest rates this week and both
are expected to keep them on hold.
    Romanian central bank board member Daniel Daianu said on the
bank's blog on Sunday that the tax on commercial banks' assets,
launched by the government last month to help rein in a rise in
the budget deficit, constrains monetary policy.
    Further comments from Governor Mugur Isarescu, whose term
will expire this year, will be closely watched on Tuesday.
    The leu traded a touch weaker, at 4.6633 against
the euro, but Bucharest's stock index rose slightly,
extending this year's gains to 4 percent.
    At 7,678 points, the index was still about 1,000 points
below early December levels before a plunge after the government
announced its tax plans for 2019, which hit several business
sectors, including banks.
    In the region's government bond markets, Poland's 10-year
yield dropped 4 basis points to 2.76 percent, after a 7 basis
point rise on Friday, tracking a rebound in U.S. yields.
    Hungary's corresponding yield stayed near Friday's increased
levels, at 2.89 percent.
    "This is a natural correction after a big decline (in
December) in the local market," one Budapest-based dealer said.
      
            CEE       SNAPSHOT   AT                         
            MARKETS             1047 CET            
                      CURRENCI                              
                      ES                            
                      Latest    Previous  Daily     Change
                      bid       close     change    in 2019
 Czech      <EURCZK=   25.5660   25.5700    +0.02%    +0.55%
 crown      >                                       
 Hungary    <EURHUF=  321.1700  321.0000    -0.05%    -0.03%
 forint     >                                       
 Polish     <EURPLN=    4.2985    4.2890    -0.22%    -0.21%
 zloty      >                                       
 Romanian   <EURRON=    4.6633    4.6611    -0.05%    -0.20%
 leu        >                                       
 Croatian   <EURHRK=    7.4310    7.4359    +0.07%    -0.28%
 kuna       >                                       
 Serbian    <EURRSD=  118.2500  118.3500    +0.08%    +0.04%
 dinar      >                                       
 Note:      calculated from               1800 CET          
 daily                                              
 change                                             
                                                            
                      Latest    Previous  Daily     Change
                                close     change    in 2019
 Prague                1006.50  1004.210    +0.23%    +2.02%
                                       0            
 Budapest             40117.39  40145.18    -0.07%    +2.50%
 Warsaw                2303.03   2284.95    +0.79%    +1.16%
 Bucharest             7678.10   7665.19    +0.17%    +3.99%
 Ljubljana  <.SBITOP    802.25    801.50    +0.09%    -0.25%
            >                                       
 Zagreb                1732.31   1729.79    +0.15%    -0.94%
 Belgrade   <.BELEX1    731.79    731.79    +0.00%    -3.93%
            5>                                      
 Sofia                  578.92    579.83    -0.16%    -2.61%
                      BONDS                                 
                      Yield     Yield     Spread    Daily
                      (bid)     change    vs Bund   change
                                                    in
 Czech                                              spread
 Republic                                           
   2-year   <CZ2YT=R    1.6110   -0.0690   +221bps     -7bps
            R>                                      
   5-year   <CZ5YT=R    1.7510    0.0370   +208bps     +5bps
            R>                                      
   10-year  <CZ10YT=    1.7670    0.0040   +158bps     +2bps
            RR>                                     
 Poland                                                     
   2-year   <PL2YT=R    1.4700   -0.0050   +207bps     -1bps
            R>                                      
   5-year   <PL5YT=R    2.2420   -0.0400   +257bps     -3bps
            R>                                      
   10-year  <PL10YT=    2.7820   -0.0070   +259bps     +1bps
            RR>                                     
            FORWARD   RATE      AGREEMEN                    
                                T                   
                      3x6       6x9       9x12      3M
                                                    interban
                                                    k
 Czech Rep                2.08      2.18      2.18      2.01
            <PRIBOR=                                
            >                                       
 Hungary                  0.32      0.54      0.81      0.13
                                                    
 Poland                   1.75      1.77      1.77      1.72
                                                    
 Note: FRA  are for ask prices                              
 quotes                                             
 *************************************************          
 *************                                      
 
 (Reporting by Sandor Peto, editing by Ed Osmond)
  
 
 
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