Reuters logo
CEE MARKETS-Zloty retreats after central bank's "wait and see"
February 8, 2017 / 10:54 AM / 7 months ago

CEE MARKETS-Zloty retreats after central bank's "wait and see"

* Zloty off multi-month highs vs euro, forint
    * Polish central bank holds rates, says wait and see
    * Romanian government survives no-confidence vote
    * Leu trades near 4-month highs vs euro

 (Adds Romanian no-confidence vote, Polish central bank
decision)
    By Sandor Peto and Bartosz Chmielewski
    BUDAPEST/WARSAW, Feb 8 (Reuters) - The zloty drifted further
from its four-month highs against the euro on Wednesday after
the Polish central bank kept interest rates on hold and stuck to
a wait and see strategy.
    The currency has outperformed Central European peers in the
last two weeks, supported by better than expected economic
output and manufacturing sentiment data.
    The zloty and Polish stocks have also been lifted by a
reversal of selling positions that dominated in 2016 due to a
less business-friendly conservative government and concerns over
democratic checks and balances.
    Ahead of elections in France and Germany, Polish politics
now look relatively less uncertain than before. 
    The Polish central bank, meanwhile, is likely to wait for
more reassuring signs of economic rebound after last year's
slowdown before considering monetary tightening. 
    A Reuters poll of analysts showed it is not expected to
start raising interest rates before the first quarter of 2018.
 
    The bank's governor Adam Glapinski said all rate setters
agreed that a wait and see strategy was best as inflation was
likely to stabilise, after rising in early 2017. 
    The zloty eased 0.4 percent against the euro to
4.3151. It also retreated from a six-month high against the
forint.
    "For the zloty, we would project increasing probability of a
short-term setback after the recent recovery," analyst Wolfgang
Ernst said in Raiffeisen's regional morning note.
    The leu, which less than a week ago hit
seven-month lows at 4.554 amid street protests over a government
decree which decriminalized certain graft offences, was steady
at 4.4875 against the euro, near Tuesday's four-month highs.
    The currency, which rebounded after the government rescinded
the decree on Sunday, extended its gains on Tuesday, after
Romanian President Klaus Iohannis admonished the government in a
parliamentary speech but backed its staying in power. 
    The government survived a no-confidence vote in parliament
on Wednesday. 
    Although the Romanian central bank kept interest rates on
hold at its meeting on Tuesday, analysts said it may start to
tighten its policies soon by narrowing the corridor between its
lending and deposit facilities. 
    
              CEE        SNAPS   AT  1702          
              MARKETS    HOT    CET           
                         CURRENCIES                
                         Lates  Previ  Daily  Chang
                         t      ous           e
                         bid    close  chang  in
                                       e      2017
 Czech crown             27.02  27.02   +0.0  -0.07
                            50     45     0%      %
 Hungary                 309.1  309.3   +0.0  -0.10
 forint                    400    000     5%      %
 Polish                  4.315  4.299  -0.36  2.06%
 zloty                       1      4      %  
 Romanian                4.487  4.487  -0.01  1.06%
 leu                         5      0      %  
 Croatian                7.459  7.450  -0.12  1.28%
 kuna                        5      5      %  
 Serbian                 123.7  123.8   +0.0  -0.34
 dinar                     700    700     8%      %
 Note: daily  calculate  previ  close  1800        
 change       d from     ous    at     CET    
                         STOCK                     
                         S                    
                         Lates  Previ  Daily  Chang
                         t      ous           e
                                close  chang  in
                                       e      2017
 Prague                  955.2  947.2   +0.8   +3.6
                             1      5     4%     5%
 Budapest                32611  32539   +0.2   +1.9
                           .93    .53     2%     0%
 Warsaw                  2083.  2086.  -0.14   +6.9
                            65     54      %     7%
 Bucharest               7605.  7629.  -0.31   +7.3
                            17     13      %     4%
 Ljubljana               754.6  746.6   +1.0   +5.1
                             4      7     7%     6%
 Zagreb                  2184.  2189.  -0.24   +9.5
                            58     82      %     1%
 Belgrade     <.BELEX15  699.6  700.9  -0.19  -2.47
              >              3      5      %      %
 Sofia                   603.6  604.2  -0.09   +2.9
                             5      0      %     4%
                         BONDS                     
                         Yield  Yield  Sprea  Daily
                                       d      
                         (bid)  chang  vs     chang
                                e      Bund   e in
 Czech                                        sprea
 Republic                                     d
   2-year     <CZ2YT=RR  -0.62   0.07   +017   +10b
              >              5           bps     ps
   5-year     <CZ5YT=RR  0.049  0.085   +050   +13b
              >                          bps     ps
   10-year    <CZ10YT=R  0.491  0.011   +020   +7bp
              R>                         bps      s
 Poland                                            
   2-year     <PL2YT=RR  2.185  -0.01   +298   +1bp
              >                     2    bps      s
   5-year     <PL5YT=RR  3.123  -0.01   +357   +3bp
              >                     7    bps      s
   10-year    <PL10YT=R  3.767  -0.04   +347   +2bp
              R>                    7    bps      s
              FORWARD    RATE   AGREEMENT          
                         3x6    6x9    9x12   3M
                                              inter
                                              bank
 Czech Rep            <   0.26   0.24   0.27      0
              PRIBOR=>                        
 Hungary              <   0.37   0.47   0.61   0.25
              BUBOR=>                         
 Poland               <  1.765  1.785  1.875   1.73
              WIBOR=>                         
 Note: FRA    are for                              
 quotes       ask                             
              prices                          
 **************************************************
 ************
 

 (Editing by Alexander Smith)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below