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CEE MARKETS-Stocks rise as concerns ease over Deutsche Bank, Hungarian vote
October 3, 2016 / 9:16 AM / a year ago

CEE MARKETS-Stocks rise as concerns ease over Deutsche Bank, Hungarian vote

* Budapest leads stocks up, Deutsche rebounded late Friday
    * Hungary's migrant vote is invalid, easing concern over EU
    * Forint, zloty off 2-week lows, sentiment remains fragile

 (Adds Budapest stocks, surge of Polish retailer LPP shares)
    By Sandor Peto
    BUDAPEST, Oct 3 (Reuters) - Central European stocks rose on
Monday as concerns over Deutsche Bank eased somewhat and turnout
in Hungary's weekend referendum on the European Union's migrant
quotas was too low to make the vote valid.
    Sentiment remained fragile though and regional currencies
were mostly flat, even though September Czech, Hungarian and
Polish manufacturing indices showed a rebound.
    Markets were encouraged by a pickup in Deutsche Bank's
shares late on Friday on a report the German lender
was close to agreeing a reduced fine with U.S. authorities,
which could help restore confidence in the troubled bank.
    Concerns still linger over Deutsche Bank, casting a shadow
over the European bank sector, even though the eventual fine may
be lower than the initial demand of up to $14 billion for
mis-selling mortgage-backed securities.
    "I would not say the mood is very, very positive... there is
uncertainty," said Monika Kiss, analyst at Equilor brokerage in
Budapest.
    While Britain set a March deadline to start its exit
proceedings from the European Union, Hungary's referendum did
not add to concerns over the bloc's future for now.
    In the vote held on Sunday, an overwhelming majority of
Hungarians who cast a vote rejected the idea of accepting
mandatory quotas of refugees set by the EU.
    But the outcome may not exacerbate a conflict with Brussels
and Germany over the quotas, which some Central European states
reject, as turnout was too low to make the poll valid.
 
    "The invalid referendum makes it difficult for Hungary... to
act as a bully" in Brussels, said Gunter Deuber, analyst at
Raiffeisen, in a note.
    "Moreover, failure in Hungary makes a repetition of such a
vote in other countries less likely," he added.
    The forint firmed by 0.1 percent against the euro
by 1310 GMT and the zloty was flat, after Hungary's
Purchasing Managers' Index jumped to 57 in September from 51.7
in August and the Czech and Polish indices also showed rising
economic activity.
    Further strong currency gains are unlikely, given the
remaining uncertainty over Deutsche Bank and concerns over
Warsaw's fiscal policy and its tensions with Brussels over the
rule of law in Poland, market participants said. 
    Budapest's main stock index led regional gains,
rising by 1.1 percent.
    Warsaw's blue-chip index rose 0.7 percent, driven
by a 2.8 percent gain in Pekao bank and an almost 10
percent jump in LPP, after Poland's biggest clothes
retailer reported a 20 percent annual surge in its revenues in
September.  
    
           CEE      SNAP   AT  1510       
           MARKETS  SHOT  CET         
                    CURRENCIES            
                    Late  Prev  Dail  Chan
                    st    ious  y     ge
                    bid   clos  chan  in
                          e     ge    2016
 Czech     <EURCZK  27.0  27.0   +0.  -0.0
 crown     =>        210   255   02%    9%
 Hungary   <EURHUF  308.  308.   +0.  2.11
 forint    =>       1400  6150   15%     %
 Polish    <EURPLN  4.29  4.29  -0.0  -0.9
 zloty     =>         90    84    2%    5%
 Romanian  <EURRON  4.45  4.45   +0.  1.53
 leu       =>         10    11   00%     %
 Croatian  <EURHRK  7.50  7.51   +0.  1.85
 kuna      =>         00    95   26%     %
 Serbian   <EURRSD  123.  123.  -0.0  -1.2
 dinar     =>       0500  0400    1%    8%
 Note:     calcula  prev  clos  1800      
 daily     ted      ious  e at  CET   
 change    from                       
                    STOC                  
                    KS                
                    Late  Prev  Dail  Chan
                    st    ious  y     ge
                          clos  chan  in
                          e     ge    2016
 Prague             869.  863.   +0.  -9.0
                      62    58   70%    7%
 Budapest           2796  2766   +1.   +16
                    8.93  4.25   10%  .92%
 Warsaw    <.WIG20  1724  1709   +0.  -7.2
           >         .53   .51   88%    4%
 Buchares           6960  6936   +0.  -0.6
 t                   .92   .84   35%    2%
 Ljubljan  <.SBITO  733.  741.  -1.1   +5.
 a         P>         39    71    2%   35%
 Zagreb    <.CRBEX  1942  1941   +0.   +14
           >         .99   .32   09%  .99%
 Belgrade  <.BELEX  636.  636.   +0.  -1.2
           15>        28    30   00%    1%
 Sofia     <.SOFIX  505.  504.   +0.   +9.
           >          91    58   26%   77%
                    BOND                  
                    S                 
                    Yiel  Yiel  Spre  Dail
                    d     d     ad    y
                    (bid  chan  vs    chan
                    )     ge    Bund  ge
                                      in
 Czech                                spre
 Republic                             ad
   2-year  <CZ2YT=  -0.5  -0.0   +01   +1b
           RR>        72    07  2bps    ps
   5-year  <CZ5YT=  -0.1  -0.0   +03   +0b
           RR>        99    02  8bps    ps
           <CZ10YT  0.25     0   +03   +0b
 10-year   =RR>                 6bps    ps
 Poland                                   
   2-year  <PL2YT=  #NAM  -0.0  #NAM   +0b
           RR>       E?     08   E?     ps
   5-year  <PL5YT=  #NAM  -0.0  #NAM  -4bp
           RR>       E?     38   E?      s
           <PL10YT  #NAM  -0.0  #NAM  -5bp
 10-year   =RR>      E?     44   E?      s
           FORWARD  RATE  AGREEMENT       
                    3x6   6x9   9x12  3M
                                      inte
                                      rban
                                      k
 Czech     <CZKFRA  0.28  0.25  0.22     0
 Rep       ><PRIBO                    
           R=>                        
 Hungary   <HUFFRA  0.74  0.71  0.72  0.88
           ><BUBOR                    
           =>                         
 Poland    <PLNFRA  1.69  1.69  1.63  1.71
           ><WIBOR     5           5  
           =>                         
 Note:     are for                        
 FRA       ask                        
 quotes    prices                     
 *****************************************
 *********************
 
 (Reporting by Sandor Peto; Editing by Mark Trevelyan and Susan
Fenton)

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