December 20, 2019 / 10:22 AM / a month ago

CEE MARKETS-Currencies mixed as markets enter Christmas lull

    By Alan Charlish
    WARSAW, Dec 20 (Reuters) - Central European currencies were mixed on Friday
in thin trade as investors began to wind down for the Christmas period.
    With the U.S. and China set to sign phase one of a trade agreement in early
January and the U.K. elections out of the way, few surprises appear to be likely
over the holidays.
    "Honestly, mate, we're waiting for Christmas," a Warsaw-based currency
trader said. "In the background you can say that the sentiment in the market is
improving -- equity markets are up, there is risk-on basically across the
board."
    A second currency trader in the Polish capital said that liquidity was low
and as a result any bigger flows could move the market.
    By 0947 GMT the Polish zloty had gained 0.09% to 4.2582. The
Hungarian forint was flat at 330.30 and the Czech crown fell 0.07% to
25.433. The Romanian leu, plagued by concern over the country's budget
and current account deficits, fell 0.13% to 4.7695.
    Stocks inched higher in early trade before slipping into negative territory,
as record-setting gains on Wall Street after news on the U.S.-China trade deal
failed to boost sentiment that had been dampened this week by fresh concerns
over a no-deal Brexit.
    At 0955 GMT Warsaw's WIG 20 was down 0.11% while Prague's PX index
 fell 0.21%. In Budapest the main index was little changed.
    Polish and Czech 10-year yields were near one-month highs, after a week in
which they tracked core market yields that rose following better-than-expected
business confidence data and an interest rate increase by the Swedish central
bank.
    Polish 10-year yields rose 7 basis points versus Thursday's
close to 2.106% while Czech 10-year yields slipped 1 basis point to
1.605%.
    "Until the end of the year, no events have been planned that could change
the mood on the debt market," PKO BP analysts wrote in a note. "In the
medium-term, the debt market will be strengthened, however, by the prospect of a
decline in the supply of Treasury securities compared to 2019."
    In Poland, retail sales rose 5.9% in November, beating the 4.8% forecast in
a Reuters poll.
    "The nominal growth of sales by 5.9% year-on-year in November is a very good
result, indicating the consumption demand of households is still high," Bank
Pocztowy Chief Economist Monika Kurtek said in a note.
    She noted, however, that the data would probably be neutral for Polish
central bankers in their January decision on interest rates.

                       CEE MARKETS        SNAPSHOT     AT  1041                  
                                                      CET                 
                                          CURRENCIES                             
                                          Latest      Previous   Daily    Change
                                          bid         close      change   in 2019
 EURCZK=    Czech                            25.4350    25.4260   -0.04%   +1.07%
            crown                                                         
 EURHUF=    Hungary                         330.3500   330.3250   -0.01%   -2.80%
            forint                                                        
 EURPLN=    Polish                            4.2585     4.2594   +0.02%   +0.73%
            zloty                                                         
 EURRON=    Romanian                          4.7705     4.7652   -0.11%   -2.44%
            leu                                                           
 EURHRK=    Croatian                          7.4390     7.4393   +0.00%   -0.39%
            kuna                                                          
 EURRSD=    Serbian                         117.3900   117.4400   +0.04%   +0.78%
            dinar                                                         
            Note:      calculated from                           1800            
            daily                                                CET      
            change                                                        
                                                                                 
                                          Latest      Previous   Daily    Change
                                                      close      change   in 2019
 .PX        Prague                           1108.98  1111.2400   -0.20%   +12.41
                                                                                %
 .BUX       Budapest                        45941.50   45944.68   -0.01%   +17.38
                                                                                %
 .WIG20     Warsaw                           2133.11    2133.72   -0.03%   -6.30%
 .BETI      Bucharest                        9891.15    9889.74   +0.01%   +33.96
                                                                                %
 .SBITOP    Ljubljana                         924.91     924.15   +0.08%   +15.00
                                                                                %
 .CRBEX     Zagreb                           2009.89    2008.24   +0.08%   +14.93
                                                                                %
 .BELEX15   Belgrade                          769.15     772.97   -0.49%   +0.98%
 .SOFIX     Sofia                             555.85     555.23   +0.11%   -6.49%
                                          BONDS                                  
                                          Yield       Yield      Spread   Daily
                                          (bid)       change     vs Bund  change
                                                                          in
            Czech                                                         spread
            Republic                                                      
 CZ2YT=RR     2-year                          1.7920     0.2460   +242bp   +26bps
                                                                       s  
 CZ5YT=RR     5-year                          1.3690    -0.0540   +187bp    -7bps
                                                                       s  
 CZ10YT=RR    10-year                         1.6050    -0.0120   +183bp    -2bps
                                                                       s  
            Poland                                                               
 PL2YT=RR     2-year                          1.4720     0.0090   +210bp    +2bps
                                                                       s  
 PL5YT=RR     5-year                          1.8210     0.0260   +232bp    +2bps
                                                                       s  
 PL10YT=RR    10-year                         2.1060     0.0700   +233bp    +6bps
                                                                       s  
                       FORWARD            RATE        AGREEMENT                  
                                          3x6         6x9        9x12     3M
                                                                          interba
                                                                          nk
            Czech Rep                           2.27       2.28     2.27     2.18
            Hungary                             0.28       0.33     0.39     0.16
            Poland                              1.71       1.70     1.67     1.70
            Note: FRA  are for ask prices                                        
            quotes                                                        
 

 (Reporting by Alan Charlish, editing by Larry King)
  
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