* U.S. rate hike expectations weigh on CEE stocks,
* OTP Bank earnings mixed, but lifts 2017 profit guidance
* OTP stock eases slightly in sour global mood
* Currencies ease on technicals, staying in recent ranges
By Sandor Peto and Lidia Kelly
BUDAPEST/WARSAW, March 3 Central European stocks
and currencies eased for a second session in a row on Friday on
the back of growing market expectations of a U.S. interest rate
hike in March.
Asian and Western European stocks also followed Wall Street
lower ahead of a speech by Fed Chair Janet Yellen, as the
prospect of higher U.S. rates turned investors towards bonds.
Warsaw's bluechip equities index fell 0.7 percent,
mainly driven by banks, though the bourse's bank stock index
hovered near the 21-month highs reached late last month.
Banks have been a key driver of the gains in regional stock
indices to multi-year highs, part of a global rally, in past
weeks, fuelled by expectations of a U.S. spending stimulus and
higher rates in the U.S., which may lift bank earnings.
Earnings reports published by Central European banks in the
past weeks have also been promising.
The latest to report was Central Europe's biggest
independent bank, Hungary's biggest lender OTP, which
posted lower-than-expected fourth-quarter earnings but said
annual profit in 2016 more than tripled to just over 200 billion
forints. The outlook for 2017 was even brighter, it said.
But with investors unwinding stock positions, OTP's share
price fell 0.7 percent, while Budapest' stock index eased 0.1
percent and is off the record highs set last month.
Higher risk provisions trimmed OTP's fourth-quarter profits,
while the bank lifted its profit guidance for 2017.
"I do not think that the positive international stock market
trend is reversed," Equilor Brokerage analyst Zoltan Varga said.
"If the good mood returns next week, OTP could rise again."
Central Europe's main currencies also eased against the
euro, with the zloty shedding 0.3 percent and the forint
and the leu easing 0.2 percent.
Friday's weakening still leaves them within the past few
"We saw an attempt to firm the zloty (earlier this week),
but it eventually failed to get out of the consolidation zone,"
said Konrad Ryczko, analyst at BOS Brokerage House, in a note.
"As a consequences, a small correction is visible and a
return to an equilibrium level with a wider range of
fluctuations," he added.
The Czech crown was steady in its implied exchange rates in
forwards contracts, after the statistics office
published a breakdown of fourth-quarter economic growth figures.
CEE SNAPSHOT AT 1054 CET
Latest Previous Daily Change
bid close change in
Czech crown 27.0200 27.0250 +0.02% -0.05%
Hungary 309.9000 309.2350 -0.21% -0.35%
Polish 4.3050 4.2919 -0.30% 2.30%
Romanian 4.5310 4.5228 -0.18% 0.09%
Croatian 7.4150 7.4200 +0.07% 1.89%
Serbian 123.4700 123.6600 +0.15% -0.10%
Note: daily calculate previous close at 1800
change d from CET
Latest Previous Daily Change
close change in
Prague 973.12 977.16 -0.41% +5.59
Budapest 33126.42 33155.19 -0.09% +3.51
Warsaw 2237.80 2254.51 -0.74% +14.8
Bucharest 7981.19 7973.00 +0.10% +12.6
Ljubljana 782.51 789.90 -0.94% +9.05
Zagreb 2222.52 2221.05 +0.07% +11.4
Belgrade <.BELEX15 718.42 720.37 -0.27% +0.15
Sofia 613.07 612.21 +0.14% +4.54
Yield Yield Spread Daily
(bid) change vs Bund change
2-year <CZ2YT=RR -0.623 -0.048 +022bp -4bps
5-year <CZ5YT=RR 0.021 -0.003 +051bp +1bps
10-year <CZ10YT=R 0.614 -0.02 +031bp -1bps
2-year <PL2YT=RR 2.175 -0.013 +302bp +0bps
5-year <PL5YT=RR 3.049 -0.015 +353bp +0bps
10-year <PL10YT=R 3.737 -0.005 +344bp +1bps
FORWARD RATE AGREEMENT
3x6 6x9 9x12 3M
Czech Rep < 0.27 0.3 0.36 0
Hungary < 0.3 0.45 0.59 0
Poland < 1.765 1.785 1.87 1.73
Note: FRA are for
(Reporting by Sandor Peto; editing by Richard Lough)