* Czech, Hungarian, Polish PMIs underpin steady, strong
* Currencies flat to weaker, Fed meeting, French vote are
* Romanian central bank seen holding fire on Friday
By Sandor Peto
BUDAPEST, May 2 Central European currencies were
steady or weaker on Tuesday, shrugging off robust manufacturing
surveys from the region amid low turnover ahead of the Federal
Reserve's meeting and the second round of France's presidential
In the Czech Republic, Prime Minister Bohuslav Sobotka
called an extraordinary news conference for 1.30 p.m. (1130 GMT)
on Tuesday to address issues related to his rival Finance
Minister Andrej Babis, leading the market to speculate that
Babis may be fired.
Markets elsewhere in the region were awaiting the Fed, which
is seen holding interest rates on Wednesday after a two-day
meeting but may hint it is on track for a rate rise in June, and
the French election result. Centrist candidate Emmanuel Macron
is expected to win the vote on Sunday, but a strengthening of
support for the French far right could unnerve investors.
Such concerns overshadowed purchasing manager surveys (PMIs)
from the Czech Republic, Hungary and Poland which indicated
continuing economic growth in Central Europe, and the Czech and
Polish figures were better than expected.
The Czech crown eased 0.2 percent even before news
of the prime minister's press conference. The Romanian leu
was also down 0.2 percent and the Polish zloty
shed 0.1 percent against the euro, while the Hungarian
forint was flat.
Regional stock exchange's were mixed, with Warsaw stocks
testing two-year highs, while Prague's main index
shed 0.5 percent.
Government bonds yields mostly rose a shade.
"Many people must still be on holiday after the long
week-end (after the May 1 bank holiday)," one Budapest-based
currency dealer said.
The Fed's comments after its meeting could influence markets
but analysts said U.S. payroll figures due on Friday could have
a bigger impact, with strong numbers potentially putting
pressure on currencies and bonds.
"The Fed will do nothing," another dealer said, adding that
eyes were on the French elections.
The leu eased to 4.5469 versus the euro after touching a
one-month high in slow international trading on Monday.
Concerns over further wage hikes proposed by the Romanian
government, which may boost the budget deficit beyond the EU's
ceiling of 3 percent of economic output, have weighed on the leu
in recent weeks.
Romanian net average wages were up by almost 15 percent in
annual terms in February, but the rise in demand has not lifted
the country's inflation, at least as yet.
The Romanian central bank (NBR) is expected to keep interest
rates on hold at its meeting on Friday.
"The NBR's press release is likely to cement its dovish tone
and, if anything, suggest a downward revision in the inflation
forecast," ING analysts said in a note.
"The rather busy end of week and some trimming of risk
positioning ahead of French elections might see EUR/RON
remaining in a 4.53-4.56 range for this week, with an upside
bias," they added.
CEE SNAPS AT 1137
MARKETS HOT CET
Lates Previ Daily Chang
t ous e
bid close chang in
Czech crown 26.91 26.85 -0.21 0.34%
50 90 %
Hungary 312.1 312.0 -0.03 -1.06
forint 400 400 % %
Polish 4.223 4.219 -0.11 4.26%
zloty 9 3 %
Romanian 4.546 4.536 -0.22 -0.26
leu 9 7 % %
Croatian 7.466 7.466 +0.0 1.19%
kuna 0 5 1%
Serbian 123.0 123.0 +0.0 0.27%
dinar 200 600 3%
Note: daily calculate previ close 1800
change d from ous at CET
Lates Previ Daily Chang
t ous e
close chang in
Prague 1002. 1007. -0.49 +8.8
97 87 % 3%
Budapest 33024 32956 +0.2 +3.1
.78 .30 1% 9%
Warsaw 2393. 2376. +0.6 +22.
22 87 9% 86%
Bucharest 8224. 8230. -0.07 +16.
57 46 % 08%
Ljubljana 782.3 788.2 -0.75 +9.0
2 5 % 2%
Zagreb 1899. 1901. -0.14 -4.79
28 87 % %
Belgrade <.BELEX15 720.6 728.9 -1.14 +0.4
> 4 4 % 6%
Sofia 661.3 657.2 +0.6 +12.
8 9 2% 78%
Yield Yield Sprea Daily
(bid) chang vs chang
e Bund e in
2-year <CZ2YT=RR -0.11 -0.11 +060 -13bp
> 3 8 bps s
5-year <CZ5YT=RR 0.113 -0.08 +048 -10bp
> 2 bps s
10-year <CZ10YT=R 1.022 0 +068 -2bps
2-year <PL2YT=RR 1.999 0.019 +272 +0bp
> bps s
5-year <PL5YT=RR 2.906 0.004 +327 -1bps
10-year <PL10YT=R 3.49 0.057 +315 +4bp
R> bps s
FORWARD RATE AGREEMENT
3x6 6x9 9x12 3M
Czech Rep < 0.34 0.4 0.51 0
Hungary < 0.25 0.33 0.42 0.16
Poland < 1.765 1.8 1.85 1.73
Note: FRA are for
(Additional reporting by Luiza Ilie in Bucharest and Bartosz
Chmielewski in Warsaw; Editing by Susan Fenton)