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United Kingdom

Marton Dunai

CEE MARKETS-Assets shrug off weaker PMI data across the region

01 Jul 2019

By Marton Dunai and Robert Muller BUDAPEST/PRAGUE, July 1 Emerging European assets mostly shrugged off worsening business sentiment readings and moved sideways, in a market that focused on the ramifications of a global trade war for core markets and kept investors guessing about emerging-market assets. While large central banks around the world try to maintain growth in the face of hostile trade relations, eastern Europe's economic outlook for now has provided a steadier hand for policymakers - but they keep their eyes peeled on a spillover of growth woes. "We expect (large) central banks to continue to try and offset the risks of a trade-war induced recession," Citibank said in a note to clients. "The ECB in particular looks ready for 'whatever it takes' part 2." Growth and inflation have crept higher in several eastern European economies, and the easing bias in core markets has allowed its central banks to avoid rate hikes, analysts have said. Polish, Czech and Hungarian central banks will all keep rates flat all year, polls suggest. But in the longer term, the trade war's effects are expected to seep into the region, posing a monetary policy challenge. "The current global environment remains challenging and will also impact the Czech economy sooner or later," said Jakub Seidler, ING chief economist for Czech Republic. "We see the (central bank) on hold... (in) a wait-and-see approach." Business sentiment surveys, which showed marked contraction in Czech and Polish business sectors and a slowing expansion in Hungary, did not faze markets just yet as growth projections there remained rosy. Polish PMI was lower than expected, below the 50-point mark separating expansion from contraction for the eighth month in a row. Economists were surprised that the fall was due to domestic demand, not export. "Worryingly, the declines in output and new business gathered pace, although the hit on the headline PMI was tempered somewhat by the first increase in employment in five months," said Trevor Balchin, director at IHS Markit. Czech PMI fell to a near 10-year low in June due to a faster-than-expected decrease in production and a fall in new business, Markit said on Monday. "The rate of contraction quicken(ed) to the fastest since December 2012. The decline was linked to weaker foreign and domestic client demand," it said. "The contraction was marked overall as firms noted that weaker demand and unplanned shutdowns in the automotive sector had weighed on new order volumes. New business from abroad fell at the fastest rate for a decade." Hungary's seasonally adjusted PMI fell to 54.4 in June from 57.9 in May but remained above the 50-point mark separating growth in manufacturing from contraction. CEE SNAPSHOT AT MARKETS 1013 CET CURRENCI ES Latest Previous Daily Change bid close change in 2019 Czech 25.4180 25.4460 +0.11% +1.14% crown Hungary 322.7600 322.8500 +0.03% -0.52% forint Polish 4.2420 4.2472 +0.12% +1.12% zloty Romanian 4.7314 4.7285 -0.06% -1.64% leu Croatian 7.3980 7.3981 +0.00% +0.16% kuna Serbian 117.7500 117.9000 +0.13% +0.47% dinar Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2019 Prague 1041.71 1041.730 -0.00% +5.59% 0 Budapest 40637.81 40279.31 +0.89% +3.83% Warsaw 2350.81 2327.67 +0.99% +3.26% Bucharest 8803.92 8814.27 -0.12% +19.23% Ljubljana 879.84 881.59 -0.20% +9.40% Zagreb 1882.57 1883.11 -0.03% +7.65% Belgrade <.BELEX15 730.12 731.62 -0.21% -4.14% > Sofia 587.40 587.81 -0.07% -1.19% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=RR 1.4830 0.0240 +222bps +2bps > 5-year <CZ5YT=RR 1.3490 0.0570 +201bps +6bps > 10-year <CZ10YT=R 1.5440 0.0000 +187bps +0bps R> Poland 2-year <PL2YT=RR 1.6220 -0.0010 +236bps +0bps > 5-year <PL5YT=RR 1.9650 -0.0100 +263bps -1bps > 10-year <PL10YT=R 2.3940 0.0000 +272bps +0bps R> FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interban k Czech Rep < 2.18 2.12 2.02 2.17 PRIBOR=> Hungary < 0.34 0.45 0.56 0.25 BUBOR=> Poland < 1.74 1.73 1.72 1.72 WIBOR=> Note: FRA are for ask prices quotes ************************************************** ************ (Reporting by Marton Dunai)

Liberal wins Budapest primary to face Orban's Fidesz in mayoral election

26 Jun 2019

BUDAPEST The first formal primary in Hungary's history, for Budapest's mayoral election, wrapped up on Wednesday as the opposition joined forces to try to wrest political leadership in the capital from Prime Minister Viktor Orban's Fidesz party.

CEE MARKETS-Forint slips ahead of rate decision

25 Jun 2019

By Marton Dunai BUDAPEST, June 25 Hungary's forint weakened slightly ahead of a central bank rate decision due later on Tuesday which is expected to leave rates flat despite inflation pressures. The Hungarian unit underperformed regional peers, which were broadly unchanged, although it remained in the wider range around 324 against the euro it has charted in recent days. Analysts said they expected Hungarian rates to stay unchanged after the European Central Bank struck a dovish tone, even with inflation in Hungary at the top of the central bank's tolerance range around 4 percent. "Emotions have calmed down ahead of the rate decision today, even considering the decision's probably limited impact," Erste Bank said in a note to clients. The forint would likely bounce back from resistance at 325 to the euro and correct toward stronger levels, it added. Takarekbank analysts said they also expected no change but on the off-chance of any monetary tightening, the forint could gain significantly. The region's largest economy, Poland, is on a robust course despite recent weaker retail sales data, mbank said in a research note. Poland on Monday reported annual retail sales growth slowed to 7.3% in May from 13.6% in April, somewhat below analyst forecasts. These numbers "don't change the general positive picture of the Polish economy," mbank said. "The fact that (major) central banks are easing monetary policy should in the longer term strengthen the zloty." "In the coming days though the zloty should remain stable; bigger moves can only be expected on Friday after data on inflation or information from the G20 summit." The region's stocks followed a weakening in emerging markets as uncertainty weighed ahead of a Trump-Xi meeting at the G20 Summit. CEE SNAPSHOT AT MARKETS 1037 CET CURRENCI ES Latest Previous Daily Change bid close change in 2019 Czech 25.5580 25.5750 +0.07% +0.58% crown Hungary 324.2000 323.4500 -0.23% -0.96% forint Polish 4.2560 4.2535 -0.06% +0.79% zloty Romanian 4.7210 4.7229 +0.04% -1.42% leu Croatian 7.3960 7.3973 +0.02% +0.19% kuna Serbian 117.7700 117.8300 +0.05% +0.45% dinar Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2019 Prague 1046.86 1056.180 -0.88% +6.11% 0 Budapest 40360.72 40475.09 -0.28% +3.12% Warsaw 2320.79 2331.08 -0.44% +1.94% Bucharest 8634.35 8625.92 +0.10% +16.94% Ljubljana 890.23 890.23 +0.00% +10.69% Zagreb 1905.02 1905.02 +0.00% +8.93% Belgrade <.BELEX15 720.44 720.44 +0.00% -5.42% > Sofia 577.50 580.11 -0.45% -2.85% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=RR 1.5820 0.0980 +231bps +9bps > 5-year <CZ5YT=RR 1.3390 0.0190 +199bps +2bps > 10-year <CZ10YT=R 1.5260 0.0040 +184bps +1bps R> Poland 2-year <PL2YT=RR 1.5770 -0.0310 +230bps -4bps > 5-year <PL5YT=RR 1.9200 -0.0360 +257bps -4bps > 10-year <PL10YT=R 2.3390 -0.0200 +265bps -1bps R> FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interban k Czech Rep < 2.18 2.08 1.99 2.17 PRIBOR=> Hungary < 0.31 0.43 0.53 0.24 BUBOR=> Poland < 1.74 1.73 1.71 1.72 WIBOR=> Note: FRA are for ask prices quotes ************************************************** ************ (Reporting by Marton Dunai; Editing by Andrew Heavens)

Four jailed for life over death of 71 migrants in Hungarian truck

20 Jun 2019

SZEGED, Hungary A Hungarian court jailed four human traffickers for life on Thursday for the deaths of 71 migrants whose decomposing bodies were found crammed inside a truck dumped on an Austrian motorway.

Hungarian IT firm 4iG eyes acquisitions to expand: CEO

19 Jun 2019

BUDAPEST Hungarian information technology firm 4iG plans to grow through debt-fueled acquisitions in the central European region, its CEO and largest shareholder Gellert Jaszai told Reuters on Wednesday.

Captain in fatal Budapest boat crash was sober at the time - police

18 Jun 2019

BUDAPEST Hungarian police said on Tuesday they had found no evidence of alcohol or drug abuse by the captain of a cruise ship that struck and sank a small tourist vessel last month, killing 28 mostly Korean people on board.

CEE MARKETS-Assets little changed as investors eye Fed meeting

17 Jun 2019

By Marton Dunai BUDAPEST, June 17 Emerging European assets were little changed ahead of a week holding few local developments, with local traders mostly eyeing a U.S. Federal Reserve meeting on Wednesday, which is expected to give indirect clues to local trading. A strengthening dollar can cause assets in more peripheral markets to fall, and the Fed's reluctance to heed calls from investors and President Donald Trump to cut rates can keep the greenback on the strong side. The Fed, amid demands by Trump to cut interest rates, is expected to leave borrowing costs unchanged but possibly lay the groundwork for a rate cut later this year as more policymakers could be open to cutting rates. If Fed comments confirm to investors that they have been too optimistic about the timing of U.S. rate cuts, the dollar may strengthen and U.S. bond yields rebound, potentially causing a weakening of CEE currencies and bonds. Expectations concerning those factors will set the tone for trade in the first days of next week. "Right now there's not a peep," a dealer said in Budapest. "We'll keep our eyes peeled on the Fed and later this month on local rate comments from the central bank." The Czech crown hung around a 9-month high, boosted by comments from central bank board member Vojtech Benda, who told Bloomberg last week that he would consider a June hike although the bank itself has signalled rate stability ahead. "Positive expectations before the Fed has boosted the crown to a certain degree. Hawkish comments from Benda could have also played a certain role. However, if no one from the Governor's inner circle joins him, it won't carry much weight for the June meeting," CSOB said in a client note. Markets still price in a cut in the next year as the next rate move. Stock markets were mixed, with the Budapest stock exchange introducing a new bank stock for MKB, a bank formerly in German hands that was nationalised and reorganised after the crisis and expects to emerge from regulatory restrictions and embark on a growth path. The bank has an initial market capitalisation of more than 197 billion forints ($685.24 million), making it the sixth-largest stock on the exchange according to a statement. Romanian markets were closed for a holiday. CEE SNAPSHOT AT MARKETS 1013 CET CURRENCI ES Latest Previous Daily Change bid close change in 2019 Czech 25.5410 25.5250 -0.06% +0.65% crown Hungary 322.3000 322.0800 -0.07% -0.38% forint Polish 4.2594 4.2566 -0.07% +0.71% zloty Romanian 0.0000 4.7230 n/a -1.45% leu Croatian 7.4040 7.4075 +0.05% +0.08% kuna Serbian 117.8000 117.9000 +0.08% +0.42% dinar Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2019 Prague 1053.96 1051.460 +0.24% +6.83% 0 Budapest 40827.26 40588.18 +0.59% +4.31% Warsaw 2279.07 2286.46 -0.32% +0.11% Bucharest 8504.24 8504.24 +0.00% +15.18% Ljubljana 872.41 871.72 +0.08% +8.47% Zagreb 1899.16 1899.83 -0.04% +8.60% Belgrade <.BELEX15 721.77 724.20 -0.34% -5.24% > Sofia 580.93 578.00 +0.51% -2.28% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=RR 1.6120 0.0280 +230bps +2bps > 5-year <CZ5YT=RR 1.5070 0.0070 +211bps +1bps > 10-year <CZ10YT=R 1.6020 0.0140 +185bps +1bps R> Poland 2-year <PL2YT=RR 1.6080 0.0320 +229bps +3bps > 5-year <PL5YT=RR 1.9710 0.0070 +257bps +1bps > 10-year <PL10YT=R 2.4100 0.0100 +266bps +1bps R> FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interban k Czech Rep < 2.16 2.06 1.97 2.17 PRIBOR=> Hungary < 0.29 0.44 0.57 0.18 BUBOR=> Poland < 1.73 1.73 1.70 1.72 WIBOR=> Note: FRA are for ask prices quotes ************************************************** ************ (Additional reporting by Jason Hovet in PRAGUE; Editing by Alison Williams)

Four eastern EU states to discuss top jobs, keen to boost their influence

12 Jun 2019

BUDAPEST The leaders of Poland, Slovakia, Hungary and the Czech Republic will discuss in Budapest on Thursday potential candidates for top jobs in the European Union coming up for grabs shortly, in a sign of regional coordination by the so-called Visegrad Four.

Cruise ship captain bailed in Hungary after fatal accident

12 Jun 2019

BUDAPEST The captain of a cruise liner was released on bail on Wednesday, two weeks after his vessel was involved in a collision with a tourist boat that sank on the River Danube in Budapest with a party of South Koreans on board.

Cruise ship captain bailed in Hungary after fatal accident

12 Jun 2019

BUDAPEST, June 12 The captain of a cruise liner was released on bail on Wednesday, two weeks after his vessel was involved in a collision with a tourist boat that sank on the River Danube in Budapest with a party of South Koreans on board.

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