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Radu-Sorin Marinas

CEE MARKETS-CEE FX eyes ECB stimulus news, forint regains some ground

12 Sep 2019

By Radu-Sorin Marinas BUCHAREST, Sept 12 Central European currencies firmed early on Thursday with Hungary's forint recovering some ground on hopes of fresh stimulus by the European Central Bank after it hit a record low of 333.46 to the euro the previous day. The ECB is widely expected to introduce a package of monetary easing and stimulus measures on Thursday to offset the effects of a U.S.-Chinese trade war and global economic slowdown. "The forint reached a new all-time low versus the euro in Wednesday afternoon trading, and then it rebounded somewhat," said brokerage Equilor. "The exchange rate could move in the range between 330 and 334 to the euro, but we are preparing for bigger movements between 1300 and 1600 CET (due to the ECB)." By 0850 GMT, the forint rose 0.3% on the day to trade at 331.32 to the euro. The Polish zloty and the Czech crown edged up 0.1% to 4.3377 and 25.8850 respectively. The Romanian leu was flat at 4.7365. Prime Minister Viktor Orban's cabinet chief Gergely Gulyas said the government had no exchange rate target when asked about the forint's slide. "I don't think the current exchange rate would give reason for any concerns," he said. Czech National Bank Vice-Governor Marek Mora said ECB's monetary easing would be an anti-inflationary factor for the Czech economy but that, at this moment, it was better to have a "wait-and-see" approach to Czech rates. Mora added that Czech interest rates should stay steady over the next year to keep domestic inflationary pressures under control even as global central banks shift towards easing rates. In Poland, which ended an easing cycle in March 2015, the Monetary Policy Council on Wednesday kept its benchmark rate at a record low of 1.5%, matching expectations in a Reuters poll. In Romania, the finance ministry plans to sell 600 million lei worth of August 2022 treasury bonds. "Today's auction should attract good demand as the tenors suit a broad range of investors. We expect an average allocation towards the lower end of the secondary market levels of 3.41%. Otherwise, the market will likely wait for the outcome of the European Central Bank meeting today," ING said in a note. CEE SNAPSHOT AT 1050 MARKETS CET CURRENCI ES Latest Previous Daily Change bid close change in 2019 Czech 25.8850 25.8950 +0.04% -0.69% crown Hungary 331.6400 332.7200 +0.33% -3.18% forint Polish 4.3377 4.3421 +0.10% -1.11% zloty Romanian 4.7365 4.7358 -0.01% -1.74% leu Croatian 7.3905 7.3923 +0.02% +0.26 kuna % Serbian 117.4200 117.6000 +0.15% +0.75 dinar % Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2019 Prague 1041.72 1043.5700 -0.18% +5.59 % Budapest 40141.28 40202.61 -0.15% +2.56 % Warsaw 2198.64 2189.21 +0.43% -3.43% Bucharest 9239.93 9228.59 +0.12% +25.1 4% Ljubljana 849.20 849.69 -0.06% +5.59 % Zagreb 1879.02 1880.09 -0.06% +7.45 % Belgrade 756.65 759.36 -0.36% -0.66% Sofia 578.91 578.22 +0.12% -2.62% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year 1.1280 -0.0820 +194bps -8bps 5-year 1.0910 -0.0910 +195bps -8bps 10-year <CZ10YT=RR 1.3850 0.0000 +197bps +2bps > Poland 2-year 1.5560 -0.0270 +237bps -3bps 5-year 1.8310 -0.0140 +269bps -1bps 10-year <PL10YT=RR 2.0620 -0.0110 +264bps +1bps > FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M interb ank Czech Rep <P 2.10 1.99 1.87 2.14 RIBOR=> Hungary <B 0.26 0.28 0.32 0.22 UBOR=> Poland <W 1.74 1.70 1.68 1.72 IBOR=> Note: FRA are for ask prices quotes ****************************************************** ******** (Additional reporting by Krisztina Than in Budapest, Jason Hovet in Prague and Alan Charlish in Warsaw; Editing by Edmund Blair)

Romanian government looks unlikely to survive confidence vote after it loses ally

27 Aug 2019

BUCHAREST Romania's Social Democrat (PSD) minority government may not survive an expected no-confidence vote next month after its sole potential partner said on Tuesday it would not lend support.

Romania's ruling PSD party loses majority after ally quits

26 Aug 2019

BUCHAREST Romania's ruling Social Democrats (PSD) lost their small parliamentary majority on Monday after a junior ally quit government over policy, leaving them vulnerable to a confidence vote.

CEE MARKETS-Zloty inches up, UK market break keeps trading thin

26 Aug 2019

By Radu-Sorin Marinas BUCHAREST, Aug 26 Central European currencies edged up in slim volumes on Monday, as many investors stayed on the sidelines due to a public holiday in Britain, with the Polish zloty propped up by plans for a balanced budget in the biggest ex-communist European Union country. Quoting sources close to the Polish administration, the daily Rzeczpospolita said the government planned to move its budget out of deficit in 2020 for the first time in 30 years. Poland enjoys a low deficit mainly due to high economic growth. The government says the budget is in good shape because of its tightening grip over tax avoidance. By 0830 GMT, the Polish zloty had firmed 0.17% to 4.3694 against the euro, followed by the Hungarian forint with a 0.06% gain. The Romanian leu and the Czech crown were flat at 4.7250 and 25.8470 to the euro respectively. "Sino-American trade war fears caused jitters on Friday but that is unlikely to affect Monday trading in Hungary," a Budapest-based dealer said. "We are 2-3 basis points lower across the yield curve, and the forint is a touch stronger against the euro, but in the absence of London this is hardly an indication." Regional stocks extended losses, falling about 0.8% on the day, as global trade jitters kept markets on the backfoot. The National Bank of Hungary is widely expected to leave its main rate and its overnight deposit rate unchanged at its Aug. 27 meeting, according to a Reuters poll. A decline in local inflation and a dovish turn by global central banks may enable it to put off its next rate increase until after 2020. Similarly, the Czechs eye stable rates. Central bank vice-governor Tomas Nidetzky said in an interview with the business daily Hospodarske Noviny that he saw stable rates through 2020 and expected the crown to trend weaker than central bank forecasts. "His outlook is quite similar to ours," Ceska Sporitelna analyst Jiri Polansky said in a note. He said the bank's next outlook would take the chance of a rate hike off the cards next year given the global backdrop of weakening growth. The Czechs have shifted into neutral on rates since May after lifting the base rate eight times since 2017 as they seek to hold down price pressures from fast-rising wages and household spending. CEE SNAPSHOT AT 1058 MARKETS CET CURRENCIES Latest Previous Daily Change bid close change in 2019 Czech 25.8460 25.8500 +0.02% -0.54% crown Hungary 328.9500 329.3500 +0.12% -2.39% forint Polish 4.3694 4.3770 +0.17% -1.83% zloty Romanian 4.7250 4.7209 -0.09% -1.50% leu Croatian 7.3897 7.3885 -0.02% +0.27% kuna Serbian 117.7400 117.9800 +0.20% +0.48% dinar Note: calculated from 1800 daily CET change Latest Previous Daily Change close change in 2019 Prague 1036.58 1045.5500 -0.86% +5.07% Budapest 39219.08 39519.58 -0.76% +0.20% Warsaw 2086.12 2103.68 -0.83% -8.37% Bucharest 9027.01 9095.00 -0.75% +22.26% Ljubljana 860.45 861.54 -0.13% +6.99% Zagreb 1870.35 1874.25 -0.21% +6.95% Belgrade <.BELEX15 749.09 751.13 -0.27% -1.65% > Sofia 575.65 576.43 -0.14% -3.16% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=RR 1.0810 -0.0040 +196bp +0bps > s 5-year <CZ5YT=RR 0.8770 0.0210 +178bp +1bps > s 10-year <CZ10YT=R 1.0940 0.0030 +176bp +0bps R> s Poland 2-year <PL2YT=RR 1.5540 -0.0270 +244bp -2bps > s 5-year <PL5YT=RR 1.6880 -0.0620 +259bp -8bps > s 10-year <PL10YT=R 1.9690 -0.0380 +264bp -4bps R> s FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M interbank Czech Rep < 2.09 1.89 1.72 2.14 PRIBOR=> Hungary < 0.33 0.39 0.43 0.27 BUBOR=> Poland < 1.74 1.73 1.69 1.72 WIBOR=> Note: FRA are for ask prices quotes ****************************************************** ******** (Additional reporting by Marcin Goclowski in Warsaw, Marton Dunai in Budapest and Jason Hovet in Prague; Editing by Dale Hudson)

CEE MARKETS-Lender OTP boosts Budapest stock index, regional FX treads water

09 Aug 2019

By Radu-Sorin Marinas and Krisztina Than BUCHAREST, Aug 9 Hungary led central European share gains on Friday, driven by strong earnings by OTP , the region's biggest independent lender, while currencies trod water, mirroring the euro that shrugged off Italy's ruling coalition tensions. OTP shares initially rose as much as 2.6% before paring gains marginally to trade at 12,600 by 0830 GMT, outperforming Budapest's as its net profit jumped 18% on the year in the second quarter to 105.4 billion forint. OTP Bank Nyrt Deputy CEO Laszlo Bencsik told a news conference that the operating environment in Hungary is "very positive," with 4.8% gross domestic product rise expected this year. Bencsik added the bank's recent acquisitions in Montenegro and in Moldova will already have an impact on the third quarter's results. "Besides the relatively favourable international sentiment, the better than expected results published by OTP could also help the stock market rise this morning," said brokerage Equilor. Hungary's rose as much as 0.9%. Other stocks in the region were mixed, with Poland's blue-chip WIG 20 index down 0.6%, Prague's PX index rising 0.3% and Bucharest's easing 0.4%. By 0840 GMT the forint and the Czech crown both edged down by same 0.1% token while the Romanian leu and the Polish zloty were virtually unchanged. Elsewhere, minutes of the Aug. 1, Czech central bank's (CNB) meeting showed its board voted unanimously to leave interest rates unchanged at 2.00%. CEE SNAPSHO AT 1037 MARKETS T CET CURRENC IES Latest Previous Daily Change bid close change in 2019 Czech <EURCZK= 25.8220 25.7990 -0.09% -0.45% crown > Hungary <EURHUF= 324.570 324.1600 -0.13% -1.07% forint > 0 Polish <EURPLN= 4.3215 4.3210 -0.01% -0.74% zloty > Romanian <EURRON= 4.7255 4.7225 -0.06% -1.51% leu > Croatian <EURHRK= 7.3890 7.3793 -0.13% +0.28% kuna > Serbian <EURRSD= 117.540 117.6400 +0.09% +0.65% dinar > 0 Note: calculated from 1800 daily CET change Latest Previous Daily Change close change in 2019 Prague 1023.37 1020.5300 +0.28% +3.73% Budapest 40655.4 40389.38 +0.66% +3.87% 1 Warsaw 2145.36 2158.88 -0.63% -5.77% Bucharest 9085.66 9121.20 -0.39% +23.05% Ljubljana <.SBITOP 856.93 859.44 -0.29% +6.55% > Zagreb 1899.94 1897.72 +0.12% +8.64% Belgrade <.BELEX1 746.59 742.05 +0.61% -1.98% 5> Sofia 584.27 583.82 +0.08% -1.71% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=R 0.9900 -0.0040 +185bp +1bps R> s 5-year <CZ5YT=R 0.8000 0.0130 +166bp +3bps R> s 10-year <CZ10YT= 0.9980 0.0070 +159bp +4bps RR> s Poland 2-year <PL2YT=R 1.5760 0.0200 +244bp +4bps R> s 5-year <PL5YT=R 1.8240 0.0210 +268bp +4bps R> s 10-year <PL10YT= 2.0070 0.0000 +259bp +3bps RR> s FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M interbank Czech Rep 2.01 1.87 1.69 2.15 <PRIBOR= > Hungary 0.28 0.31 0.33 0.25 Poland 1.72 1.69 1.68 1.72 Note: FRA are for ask quotes prices ************************************************ ************** (Editing by Keith Weir)

CEE MARKETS-Central European forex eases in subdued trade, eyes on U.S. data

05 Jul 2019

* CEE currencies seen firming slightly on ECB easing-POLL * U.S. non-farm payroll data awaited * Romania's central bank keeps rate on hold as expected * Trade muted, Czech market closed By Radu-Sorin Marinas BUCHAREST, July 5 Central European currencies edged down in thin trade on Friday, tracking the euro's moves, with Czech markets closed for a holiday and traders waiting for the publication of U.S. jobs data. By 0840 GMT, the Hungarian forint led regional losses, falling 0.2% against the euro as the Romanian leu slipped 0.1% and the Polish zloty traded marginally lower at 4.244. Regional stocks were mixed, with Budapest gaining 0.4% percent, while Warsaw was 0.2% lower on the day. Earlier in the session, Hungary sold 5-year and 10-year bonds, but scrapped a 3-year bond auction. A Reuters poll sees Central Europe's main currencies firming slightly against the euro in the coming year, as central banks in the region point to stable rates ahead in contrast to the easing signalled in Frankfurt and Washington. A surge in wages has boosted economic growth in Central Europe, accelerating inflation, in contrast with a slowdown in the euro zone. On Thursday, Romania's central bank kept its main interest rate unchanged at 2.50% despite rising inflation, with central bank governor Mugur Isarescu saying the rate was high enough considering the recent firming of the leu currency. "(The) governor ... cited 'significant' capital inflows in yesterday's press briefing which followed the key rate decision, leading him to state 'we don’t want the exchange rate to appreciate'. For now, the market doesn’t appear to be listening, as selling interest in euro/leu still prevails," ING said. Elsewhere, Hungary's industrial output rose by an annual 8.7 percent in May based on preliminary unadjusted data, well above analyst forecasts. "The latest industrial figures can again be seen as proof that so far the performance of the sector has proved surprisingly resilient to global (especially German) slowdown, mainly stemming from trade conflicts and increased uncertainties in the European business sector." Erste said. CEE SNAPSHOT AT 1010 MARKETS CET CURRENCIES Latest Previous Daily Change bid close chang in 2019 e Czech <EURCZK= 0.0000 25.4660 -0.02 +0.93% crown > % Hungary <EURHUF= 323.2900 322.6500 -0.20 -0.68% forint > % Polish <EURPLN= 4.2440 4.2430 -0.02 +1.07% zloty > % Romanian <EURRON= 4.7209 4.7167 -0.09 -1.42% leu > % Croatian <EURHRK= 7.3970 7.3985 +0.0 +0.18% kuna > 2% Serbian <EURRSD= 117.5600 117.7500 +0.1 +0.63% dinar > 6% Note: calculated from 1800 daily CET change Latest Previous Daily Change close chang in 2019 e Prague 1052.10 1052.1000 +0.0 +6.64% 0% Budapest 41133.74 40972.92 +0.3 +5.10% 9% Warsaw 2353.23 2356.49 -0.14 +3.36% % Bucharest 8907.37 8917.19 -0.11 +20.64% % Ljubljana <.SBITOP 891.46 890.47 +0.1 +10.84% > 1% Zagreb 1893.91 1891.84 +0.1 +8.30% 1% Belgrade <.BELEX1 741.91 742.59 -0.09 -2.60% 5> % Sofia 582.50 582.29 +0.0 -2.01% 4% BONDS Yield Yield Sprea Daily d (bid) change vs change in Bund Czech spread Republic 2-year <CZ2YT=R 1.5990 0.1200 +235 +12bps R> bps 5-year <CZ5YT=R 1.2400 0.0020 +194 +0bps R> bps 10-year <CZ10YT= 1.4890 -0.0050 +188 -1bps RR> bps Poland 2-year <PL2YT=R 1.5830 0.0040 +233 +1bps R> bps 5-year <PL5YT=R 1.8710 0.0010 +257 +0bps R> bps 10-year <PL10YT= 2.2830 0.0010 +268 +0bps RR> bps FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M interbank Czech Rep 2.17 2.10 2.00 2.17 <PRIBOR= > Hungary 0.29 0.41 0.49 0.25 Poland 1.74 1.73 1.70 1.72 Note: FRA are for ask prices quotes ************************************************* ************* (Editing by Andrew Heavens)

Romania's president eyes new term, not EU's top job

29 Jun 2019

BUCHAREST Romania's centrist President Klaus Iohannis said on Saturday he would decline any offer to get the European Union's top job, seeking instead to win a fresh term as the country's president.

CEE MARKETS-CEE currencies edge lower, all eyes on Fed

19 Jun 2019

By Radu-Sorin Marinas BUCHAREST, June 19 Central European currencies eased marginally on Wednesday in cautious trade ahead of the outcome of a U.S. Federal Reserve policy meeting, with little impact from ECB chief Mario Draghi's unexpectedly strong hints about more stimulus. The Fed, which concludes its latest policy meeting on Wednesday, is expected to leave interest rates on hold but flag whether it plans to cut rates later this year. Traders say a lower path for U.S. interest rates and a weaker dollar would be generally positive for currencies in the European Union's emerging east. "Emerging market currency traders patiently await the outcome of the US Fed's meeting later today. Indeed, US rates as well as the euro/dollar exchange rate are key systemic drivers for asset prices," analysts at Raiffeisen said. 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 Central European currencies and bonds. A more hawkish than expected US stance, however, can lead to a significant sell-off in emerging currencies, said Raiffeisen. ECB policymakers were divided on Tuesday after Draghi hinted at new stimulus measures that had yet to be discussed by the ECB's Governing Council. Draghi told an ECB conference the central bank would ease policy again if inflation fails to accelerate, saying that fresh bond purchases, rate cuts or changes to the ECB's policy guidance had all been "raised and discussed" at a meeting of the ECB Governing Council less than two weeks ago. The forint traded 0.17% down on the day by 0910 GMT, followed by the Polish zloty and Czech crown with 0.15% and 0.14% drops respectively. The Romanian leu was flat at 4.7260 to the euro. Czechs auction a euro-denominated domestic bond, with Komercni Banka trader Dalimil Vyskovsky saying that "with the Draghi message yesterday we expect demand to be strongish again despite the paper being issued under domestic law and thus limiting the range of investors that can subscribe." CEE SNAPSHOT AT MARKETS 1157 CET CURRENCIES Latest Previous Dail Change y bid close chan in 2019 ge Czech 25.6390 25.6000 -0.1 +0.27% crown 5% Hungary 323.7000 323.2000 -0.1 -0.81% forint 5% Polish 4.2683 4.2609 -0.1 +0.50% zloty 7% Romanian 4.7260 4.7228 -0.0 -1.52% leu 7% Croatian 7.4050 7.4053 +0. +0.07% kuna 00% Serbian 117.8500 117.8900 +0. +0.38% dinar 03% Note: calculated from 1800 daily CET change Latest Previous Dail Change y close chan in 2019 ge Prague 1057.67 1055.180 +0. +7.21% 0 24% Budapest 40998.31 40922.41 +0. +4.75% 19% Warsaw 2322.59 2325.16 -0.1 +2.02% 1% Bucharest 8570.74 8525.82 +0. +16.08% 53% Ljubljana 879.13 873.95 +0. +9.31% 59% Zagreb 1898.22 1899.99 -0.0 +8.54% 9% Belgrade 720.21 720.41 -0.0 -5.45% 3% Sofia 578.64 578.05 +0. -2.66% 10% BONDS Yield Yield Spre Daily ad (bid) change vs change in Bund Czech spread Republic 2-year 1.5940 0.0410 +23 +1bps 1bps 5-year 1.4560 -0.0020 +21 -4bps 1bps 10-year <CZ10YT=RR 1.5530 -0.0110 +18 -4bps > 5bps Poland 2-year 1.5760 -0.0120 +22 -4bps 9bps 5-year 1.9670 -0.0180 +26 -5bps 2bps 10-year <PL10YT=RR 2.3770 0.0350 +26 +1bps > 7bps FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interbank Czech Rep <P 2.15 2.04 1.88 2.17 RIBOR=> Hungary <B 0.29 0.40 0.50 0.00 UBOR=> Poland <W 1.74 1.73 1.71 1.72 IBOR=> Note: FRA are for ask prices quotes ************************************************* ************* For related news and prices, click on the codes in brackets: All emerging market news Spot FX rates Eastern Europe spot FX Middle East spot FX Asia spot FX Latin America spot FX Other news and reports World central bank news Economic Data Guide Official rates Emerging Diary Top events Diaries Diaries Index (Editing by Hugh Lawson)

Romania's government survives no-confidence vote

18 Jun 2019

BUCHAREST Romania's Social Democrat (PSD) coalition government survived a parliamentary no-confidence vote on Tuesday, strengthening Prime Minister Viorica Dancila's chances of being confirmed as PSD leader at a party congress this month.

Pope urges Romanian leaders to shun personal interests, seek common good

31 May 2019

BUCHAREST Pope Francis urged Romania's leaders on Friday to shun personal interests and work together for the common good, arriving in the former communist country amid political upheaval caused by a corruption scandal. | Video

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