* Budapest stocks at record high, Bucharest a three-month
* Fed rate hike priced in, not very hawkish comments hoped
* CEE bond yields fall, short-dated Romanian bonds in the
* Croatian central bank sells kuna at auction to weaken it
(Adds Croatian central bank FX intervention, new comment)
By Sandor Peto and Radu-Sorin Marinas
BUDAPEST/BUCHAREST, Dec 14 Central European
assets gained on Wednesday, with Budapest stocks reaching a
record high, on optimism the Federal Reserve will not signal
U.S. interest rates are going to rise higher and faster than is
Investors waiting for the Fed's comments shrugged off local
factors, including political uncertainty in Romania after
Comments by U.S. president-elect Donald Trump have led to
expectations for accelerating inflation and higher interest
rates. Higher U.S. rates make assets in emerging economies less
Investors expect the Fed to raise its main rate by 25 basis
points, but that change has been priced in. If the comments are
not very hawkish, emerging market assets may see some buying.
"The main market interest will be in whether U.S.
authorities will adjust their projections in terms of economy,
inflation and especially the key rate path," Raiffeisen analyst
Wolfgang Ernst said in a note.
Budapest's stock index, one of the best performers in
the world in the past two years, maintained its momentum. It
rose past 31,000 points and set a record high for the second
straight day. It was up 1.3 percent at 1355 GMT.
"Shaking off technical barriers, the stocks may have
attracted even more buyers," said Equilor brokerage analyst
Bucharest stocks gained 0.3 percent. Their main index
climbed to its highest since September despite political
uncertainty after Sunday's elections and weak industrial output
The election's winner, the Social Democrat Party, declined
to meet the president on Wednesday for talks on a new
government. The party's leader, Liviu Dragnea, said the party
would propose a candidate for prime minister only after a new
parliament is sworn in.
The party also said on Tuesday that it would postpone tax
cuts planned for 2017, good news for investors who fear a budget
Romania's 10-year bond yield was bid lower by 14
basis points at 3.51 percent, but short-term bonds eased,
continuing to underperform regional peers like Hungary, where
short-dated bills and bonds traded near record lows.
Regional currencies retreated, reflecting caution before the
The leu, after touching a four-week low against
the euro, traded at 4.5138, down 0.15 percent.
"There's large buying by an offshore player right now.
Domestic politics have had no impact on the market," one
Bucharest-based dealer said.
Croatia's kuna shed 0.3 percent to 7.545 versus
the euro as the central bank bought euros at an auction to
weaken the kuna, for which it maintains a managed float
CEE MARKETS SNAPSHOT AT 1455 CET
Latest Previous Daily Chan
bid close change in
Czech 27.0220 27.0355 +0.05% -0.0
Hungary 314.8000 314.4850 -0.10% -0.0
Polish 4.4430 4.4408 -0.05% -4.1
Romanian 4.5138 4.5069 -0.15% 0.12
Croatian 7.5450 7.5235 -0.28% 1.25
Serbian 123.4000 123.4800 +0.06% -1.5
Note: calculated from previous close at 1800
Latest Previous Daily Chan
close change in
Prague 907.11 911.09 -0.44% -5.1
Budapest 31328.99 30938.13 +1.26% +30
Warsaw 1921.16 1919.49 +0.09% +3.
Buchares 7004.53 6985.06 +0.28% +0.
Ljubljan 711.11 704.90 +0.88% +2.
Zagreb 1983.57 1984.90 -0.07% +17
Belgrade 719.46 725.63 -0.85% +11
Sofia 583.12 580.85 +0.39% +26
Yield Yield Spread Dail
(bid) change vs Bund chan
2-year -0.747 0.054 +001bp +6b
5-year -0.153 -0.01 +031bp +1b
0.526 -0.02 +021bp +1b
10-year s ps
2-year 1.97 0 +273bp +1b
5-year 2.76 -0.059 +322bp -4bp
3.493 -0.053 +317bp -2bp
10-year s s
FORWARD RATE AGREEMENT
3x6 6x9 9x12 3M
Czech 0.28 0.24 0.22 0
Hungary 0.38 0.42 0.5 0.39
Poland 1.75 1.765 1.795 1.73
Note: are for ask prices
(Additional reporting by Marcin Goettig in Warsaw; Editing by