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UPDATE 1-CEE MARKETS-Cbank tender weakens forint; zloty jittery on reform fears
September 25, 2017 / 2:54 PM / 3 months ago

UPDATE 1-CEE MARKETS-Cbank tender weakens forint; zloty jittery on reform fears

    * Polish president wants greater say in nomination of judges
    * Political concerns keep Polish assets jittery
    * Hungarian cbank pumps money into markets through swap
tender
    * Czech central bank seen keeping rates on hold on Wednesday

 (Recasts with Polish president's proposals, Hungarian tender,
Reuters poll on Czech rate meeting)
    By Sandor Peto and Bartosz Chmielewski
    BUDAPEST/WARSAW, Sept 25 (Reuters) - The zloty and forint
eased on Monday as Hungary's central bank (NBH) pumped further
liquidity into markets while Polish President Andrzej Duda
demanded a greater say over the nomination of judges. 
    In July Duda vetoed judicial reforms passed by parliament,
but his own proposals, tabled on Monday, will also be closely
scrutinised by the European Union and rights groups concerned
about Warsaw's compliance with rule-of-law standards.

    The zloty was jittery and trading down 0.2 percent
at 4.2712 against the euro at 1412 GMT.
    Polish government bond prices tracked euro zone peers higher
but gave up some of their gains, with the 10-year paper trading
at a yield of 3.2845 percent, still down 4 basis points.
    While equities mostly eased in Central Europe, traders did
not see any significant impact on regional assets from elections
in Germany, the region's biggest export market and a key power
in the EU.        
    German Chancellor Angela Merkel won a fourth term in
Sunday's vote but will face tough coalition talks after the
Social Democrats (SPD) said they would not continue to rule with
her and harsh opposition criticism after a surge in support for
the far-right.
    The SPD's withdrawal from the government could prove
positive for Poland because SPD politicians have been vocal
critics of Poland's right-wing government, said Millennium Bank
analyst Mateusz Sutowicz.
    The forint tested four-month lows against the
euro. Trading at 310.35, it was down 0.2 percent.
    It was weakened by the NBH's euro/forint swap tender, which
provided commercial banks with additional forint liquidity, also
contributing to a continuing slide in Hungarian government debt
yields.
    The yield on three-year paper dropped 4 basis points from
their early levels to 0.36 percent.
    The Czech crown was steady at 26.04 against the
euro ahead of the Czech central bank's meeting on Wednesday. 
    Five out of 16 analysts in a Reuters poll projected that the
bank would lift interest rates further at the meeting, while 10
forecast a rise at the next meeting in November.
    Czech billionaire Andrej Babis's ANO party maintains a
strong lead going into an Oct. 20-21 election with support at
30.9 percent, according to an opinion poll released on Monday.

    Babis told Reuters on Friday that the Czech Republic and
similar smaller states should have a stronger voice in the
European Union. 
    
               CEE MARKETS  SNAPSH   AT  1612 CET         
                            OT                      
                            CURRENCIES                    
                            Latest  Previo  Daily   Change
                                    us              
                            bid     close   change  in
                                                    2017
 Czech crown                26.040  26.039   +0.00   3.71%
                                 0       0       %  
 Hungary                    310.35  309.88  -0.15%  -0.49%
 forint                         00      00          
 Polish zloty               4.2712  4.2673  -0.09%   3.11%
 Romanian leu               4.5990  4.5983  -0.02%  -1.39%
 Croatian                   7.4850  7.4845  -0.01%   0.94%
 kuna                                               
 Serbian                    119.45  119.40  -0.04%   3.26%
 dinar                          00      00          
 Note: daily   calculated   previo  close   1800          
 change        from         us      at      CET     
                            STOCKS                        
                            Latest  Previo  Daily   Change
                                    us              
                                    close   change  in
                                                    2017
 Prague                     1041.2  1046.5  -0.50%   +12.9
                                 6       1              8%
 Budapest                   38070.  38178.  -0.28%   +18.9
                                81      63              6%
 Warsaw                     2458.5  2480.7  -0.90%   +26.2
                                 0       3              1%
 Bucharest                  7884.5  7848.1   +0.46   +11.2
                                 2       0       %      8%
 Ljubljana                  802.66  799.42   +0.41   +11.8
                                                 %      5%
 Zagreb                     1819.3  1829.4  -0.55%  -8.80%
                                 6       2          
 Belgrade                   724.02  725.19  -0.16%   +0.93
                                                         %
 Sofia                      680.87  678.65   +0.33   +16.1
                                                 %      0%
                            BONDS                         
                            Yield   Yield   Spread  Daily
                            (bid)   change  vs      change
                                            Bund    in
 Czech                                              spread
 Republic                                           
   2-year                    0.056   0.282   +076b   +30bp
                                                ps       s
   5-year                    0.112  -0.091   +041b   -5bps
                                                ps  
   10-year                   1.106  -0.076   +070b   -4bps
                                                ps  
 Poland                                                   
   2-year                    1.726  -0.051   +243b   -3bps
                                                ps  
   5-year                     2.64  -0.046   +294b   -1bps
                                                ps  
   10-year                   3.294  -0.046   +288b   -1bps
                                                ps  
               FORWARD      RATE    AGREEMENT             
                            3x6     6x9     9x12    3M
                                                    interb
                                                    ank
 Czech Rep             <PR    0.71    0.86    0.96       0
               IBOR=>                               
 Hungary               <BU    0.09    0.08    0.11    0.04
               BOR=>                                
 Poland                <WI   1.759    1.81   1.865    1.73
               BOR=>                                
 Note: FRA     are for ask                                
 quotes        prices                               
 *********************************************************
 *****
 
 (Additional reporting by Jason Hovet in Prague/Marcin Goettig
in Warsaw; Editing by David Goodman)
  
 
 

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