March 27, 2017 / 9:10 AM / 4 months ago

CEE MARKETS-Sofia, after elections, bucks U.S.-triggered stocks fall

7 Min Read

    * Pro-EU ruling party wins Bulgarian elections, Sofia stocks
up
    * CEE stocks, bond yields fall as trust in Trump stimulus
cracks
    * Romanian bonds buck firming ahead of budget figures

    By Sandor Peto
    BUDAPEST, March 27 (Reuters) - Bulgarian stocks rose on
Monday after the pro-EU governing  party won a parliamentary
election, bucking a fall in equities and bond yields elsewhere
in Central Europe.
    Risk appetite declined, similarly to trends in Asia and
Western Europe, after confidence in new U.S. President Donald
Trump's ability to deliver his agenda took a blow when he failed
to push through a healthcare reform bill.
    But the index of the Bulgarian stock exchange,
which often has low turnover, rose by almost half a percent by
0816 GMT.
    In preliminary results of Sunday's elections, the
pro-European Union centre-right GERB party led, scoring 32.58
percent, ahead of the pro-Russian Socialist party with 26.8
percent.
    "Therefore, fears about a change in the overall policy
course and possibly a somewhat more pro-Russia stance should
abate soon," said Raiffeisen analyst Gunter Deuber in a note.
    Warsaw led a decline of stocks elsewhere in the region. Its
blue-chip index shed 1.5 percent, led by the country's
biggest lender PKO BP, which fell 1.7 percent. 
    The forint and the zloty eased slightly
against the euro. Bond yields fell across the region as yields
in the EU mostly tracked U.S. Treasuries.
    Poland's 10-year bond yield dropped 4 basis points to 3.52
percent, and Hungary's corresponding yield was lower by 7 basis
points from Friday's fixing, at 3.35 percent.
    The yield of the two country's long-term bonds are now back
at levels around the year-end after rise in the past months due
to expectations for economic stimulus and rising interest rates
in the U.S. under president Trump.
    "The Trump course is being unwound as expectations for less
bond-supportive monetary policies fade," one Budapest-based
fixed income trader said. "Also there is an increasing feeling
that reflation (in the world) could prove temporary."
    Romanian government bonds tracked the firming of bond
prices.
    Mid-2026-expiry Romanian bonds were flat ahead of
the publication of January-February government budget figures.
The 10-year yield dropped in tandem with regional peers last
week, but it is still near its highest level since mid-2015.    
 
    Fears that the leftist government which rules since January
will boost the budget deficit have weighed on Romanian assets.
    The Czech 10-year yield is also near its highest level since
mid-2015. 
    Foreign investors who speculated in the past months that the
Czech central bank would remove its cap on the crown currency's
value soon, mainly bought short-term Czech bonds.
    The yield on the 2-year paper fell 9 basis points on Monday,
to -0.48 percent. 
              CEE        SNAPS   AT  1016          
              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  -0.05
                            00     00     0%      %
 Hungary                 310.1  309.9  -0.04  -0.41
 forint                    000    700      %      %
 Polish                  4.265  4.261  -0.07  3.26%
 zloty                       0      9      %  
 Romanian                4.551  4.552   +0.0  -0.36
 leu                         2      0     2%      %
 Croatian                7.431  7.419  -0.15  1.67%
 kuna                        0      5      %  
 Serbian                 123.9  123.9   +0.0  -0.44
 dinar                     000    500     4%      %
 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                  978.2  982.5  -0.43   +6.1
                             8      3      %     5%
 Budapest                31886  32097  -0.66  -0.37
                           .22    .09      %      %
 Warsaw                  2200.  2234.  -1.53   +12.
                            56     82      %    97%
 Bucharest               7959.  7981.  -0.27   +12.
                            82     01      %    35%
 Ljubljana               790.0  791.7  -0.21   +10.
                             1      1      %    09%
 Zagreb                  2117.  2112.   +0.2   +6.1
                            13     83     0%     3%
 Belgrade     <.BELEX15  746.1  746.1   +0.0   +4.0
              >              2      2     0%     1%
 Sofia                   642.4  639.6   +0.4   +9.5
                             5      3     4%     5%
                         BONDS                     
                         Yield  Yield  Sprea  Daily
                                       d      
                         (bid)  chang  vs     chang
                                e      Bund   e in
 Czech                                        sprea
 Republic                                     d
   2-year     <CZ2YT=RR  -0.48  -0.08   +026  -9bps
              >              1      8    bps  
   5-year     <CZ5YT=RR  0.198  -0.03   +053  -1bps
              >                     7    bps  
   10-year    <CZ10YT=R  0.979  -0.02   +061   +1bp
              R>                    6    bps      s
 Poland                                            
   2-year     <PL2YT=RR  2.039  0.023   +278   +3bp
              >                          bps      s
   5-year     <PL5YT=RR  2.939  -0.01   +327   +1bp
              >                     7    bps      s
   10-year    <PL10YT=R  3.535  -0.03   +316   +1bp
              R>                    3    bps      s
              FORWARD    RATE   AGREEMENT          
                         3x6    6x9    9x12   3M
                                              inter
                                              bank
 Czech Rep            <   0.29   0.32    0.4      0
              PRIBOR=>                        
 Hungary              <   0.25   0.32   0.44   0.21
              BUBOR=>                         
 Poland               <   1.77  1.785   1.83   1.73
              WIBOR=>                         
 Note: FRA    are for                              
 quotes       ask                             
              prices                          
 **************************************************
 ************
 
 (Reporting by Sandor Peto; Editing by Keith Weir)
  
 
 

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